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ARTICLE · 17 MAY 2021

The Digital Services Tax: Canada Takes Aim At Tech Giants

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In the recently released Budget 2021, Canada's federal government announced its plan to continue with the development of a Digital Services Tax (DST) to be imposed on certain large taxpayers.

CanadaTax
Blake A. Haarstad
Blake A. Haarstad
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In the recently released Budget 2021, Canada's federal government announced its plan to continue with the development of a Digital Services Tax (DST) to be imposed on certain large taxpayers. The DST is proposed to apply at a rate of 3 percent on revenue exceeding $20 million from certain digital services that rely on the engagement, data and content contributions from Canadian users. While draft legislation has not yet been released, Budget 2021 laid out the intended parameters of the new rules and suggested that they are intended to apply beginning on January 1, 2022. However, given the fundamental nature of these proposed changes, the government has signaled that it wishes to hear from affected taxpayers and stakeholders, and has invited the submission of written representations on these proposals by June 18, 2021.

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