Digital Services Tax Act (Canada)
| Digital Services Tax Act | |
|---|---|
| Parliament of Canada | |
| |
| Citation | S.C. 2024, c. 15, s. 96 |
| Assented to | 20 June 2024 |
| Commenced | In force 28 June 2024 |
| Legislative history | |
| Bill title | Bill C-59 |
| Introduced by | Hon. Chrystia Freeland, Deputy Prime Minister and Minister of Finance |
Canada's digital services tax (DST) was a 3% tax on Canadian-source digital services revenue (i.e., services that rely on engagement, data, and content contributions of Canadian users). The tax applied to foreign and Canadian firms with annual worldwide revenues of €750 million or more, and annual revenue greater than $20 million on Canadian-source digital services including online marketplaces, online advertising, social media, and user data services.
The Minister of Finance announced plans to implement a DST in November 2020, saying a robust tax base requires "those who do business in Canada paying their fair share of tax." The DST entered into force on 28 June 2024. It applied to revenue earned from 1 January 2022, with first tax payments due by 30 June 2025.
The Canadian DST was modelled after similar taxes implemented by other countries, including France and the UK. The Parliamentary Budget Officer estimated that the DST would raise revenues of $7.2 billion from 2023 to 2027.
The U.S. Trade Representative requested dispute-settlement consultations under the United States-Mexico-Canada Agreement (CUSMA) in August 2024, saying Canada's DST discriminated against American firms. On 29 June 2025 Canada announced it would repeal the DST. This prompted a restart of trade negotiations with the United States, as President Trump had said that talks were being suspended because of Canada's plan to implement the tax.