Canada rescinds digital services tax for the US: What is it and why did Trump want it gone?
The Canadian government rescinded a digital services tax that was set to take effect on Monday after President Donald Trump threatened to break off trade negotiations between the U.S. and Canada over the tax.
Canada’s government adopted its 3% digital services tax a year ago and collections were due to begin on Monday. The tax applied to large tech companies that made more than $20 million a year in revenue from online marketplace services, online advertising, social media services and certain sales of user data involving engagement with users in Canada.
The digital services tax would apply regardless of whether the company is headquartered in Canada, and also would’ve applied retroactively to 2022, putting a roughly $2 billion tax burden on major U.S. tech companies that do business in Canada.
Canada’s digital services tax elicited pushback from both the Trump administration and the Biden administration, which was in office when it was initially devised and said the proposed tax was inconsistent with an existing trade agreement. Tech companies like Amazon, Meta, Google and Apple opposed the tax.
This is an excerpt from an article by FOX Business’ Eric Revell