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Canada 3% Digital Services Tax proposal Jan 2024

Canada is proposing to become the latest country to introduce a digital services tax (DST) on multi-media nationals. This would include a 3% turnover levy on local sales of certain services once over an annual sales threshold. This is dependent on a settlement of a similar global DST at the OECD.

This comes as Canada imposed 5% GST on digital services sales to consumers from 1 January 2021. Check VAT Calc’s Global Digital Services Tax  Tracker to see which other countries have proposed and implemented such tax.

DST on 2022 revenues; only payable 2024 if OECD talks fail

The new charge on data and content contribution by Canadian users would become liable from 1 January 2022. This would include digital advertising, online marketplaces, social media and the sale/licensing of user data. However, the first payments would only be due from 1 January 2024 in the event there is no agreement on Pillar 1 of the OECD talks

The thresholds for having to start collecting the taxes would be:

  • Global revenues above €750m as per the OECD’s model; and
  • Canadian revenues above CAD20m

Americas Digital Services Taxes (DST)

Country Status Rate Annual sales threshold Scope
In-country income Global income
Argentina Dec 2020 5%, 10%, 15% Online gambling
Brazil - 1 Proposed 1-5% BRL 100m BRL 3bn Advertising; user data; interfaces;
Brazil - 2 Proposed 3% on COFINS BRL 78m $240m Advertising; platform services for selling goods and services
Brazil - 3 Proposed 3% BRL 4.5bn Advertising; platform interaction services; data
Brazil - 4 Proposed 3% - 10% BRL 100m Media; apps; gaming; gambling (10%); software
Brazil - 5 Proposed 3% Advertising; user data; payment platforms; media
Canada Jan 2024 3% CAD 20m €750m Advertising, online marketplaces, social media and the sale/licensing of user data.
Colombia 2023 5% US$ 264k - Advertising; streaming or download media; user data; e-learning - Significant Economic Presence test
Costa Rica Nov 2019 Tourist accommodation rentals
Paraguay Jan 2021 4.5% Non-resident: media; gaming; data processing; advertising; gambling; software
Uruguay Jan 2018 12% Digital services Non-residents


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