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|