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Canada Moves Forward With New Tech Tax

  

Category:  Other

Via:  hallux  •  last year  •  19 comments

By:   Vjosa Isai - NYT

Canada Moves Forward With New Tech Tax

S E E D E D   C O N T E N T


Canada will hang tough on technology companies. That was the message from government officials this week after Meta, the company that owns Facebook and Instagram, began blocking news articles from appearing on its platforms in Canada.

[ Read our story about Meta’s news ban here. ]

That wasn’t the only example this week of Canada’s holding firm on tech. The release on Friday of an   explanatory note   — a document produced in the legislative process to clarify parts of a bill or amendments — about the Digital Services Tax Act, which goes into effect as soon as January, made fewer waves.

It is a 3 percent tax on the revenues of large technology companies, including those with online marketplaces, like Walmart and Amazon, and social media platforms, like Meta.

The tax in Canada will apply to companies with annual revenue of at least 750 million euros, a threshold set through the Organization for Economic Cooperation and Development.

The O.E.C.D. is leading negotiations with more than 130 countries in a global deal to end tax havens, but Canada has broken away from the pack by setting its own tax   amid delays .

My colleagues on the Business desk, Alan Rappeport and Liz Alderman, have been covering the O.E.C.D. negotiations and have reported that the deal is expected to generate around $150 billion in global tax revenue each year.

[ Read Alan and Liz’s article here:  Global Deal to End Tax Havens Moves Ahead as Nations Back 15% Rate ]

Austria, France, Italy, Spain and Britain imposed their own digital services taxes in 2021 and were soon after   threatened with tariffs by the United States . Washington stood down after the European nations agreed to eventually remove their taxes, but only after the implementation of the first part of the global agreement, which would give taxing rights to the jurisdictions where those companies make profits. At the time, Canada also agreed to pause its digital services tax and wait for the deal to come into effect.

But in July, several of the countries moved to delay for one year the implementation of any new domestic digital services taxes.

Chrystia Freeland, the deputy prime minister, said in a   statement   last month that Canada “cannot support the extended standstill” and would plan to go ahead with its digital services tax in January.

“We are acutely disappointed with Canada’s decision today to move forward with their plans,” the National Foreign Trade Council, an American lobby group, said in a   statement   on Friday after the publication of the act’s explanatory note.

It also called the act “clearly discriminatory toward U.S. companies.” But that characterization verges on disinformation, said Wei Cui, a tax law professor at the University of British Columbia who is writing a book on the digital services tax.

“Canada has come up with a principled way of levying the tax that should not provoke a trade controversy,” Professor Cui told me, adding that domestic online retailers like Canadian Tire and Loblaw Companies would also be taxed in the same way as American companies.

Professor Cui expected that the law would pass after Parliament resumes in September and said it had a robust policy justification.

“Online platforms generate a specific kind of profit — and in academic terms, I call it ‘platform rent’ — that should be taxed,” he said, likening it to existing special taxes imposed on companies in the natural resource, timber, and oil and gas industries.

“It’s not clear to me why the Canadian government has not pushed back” against accusations that the law is discriminatory, Professor Cui said, “because that’s an easy argument to make.”


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Hallux
Professor Principal
1  seeder  Hallux    last year

No surprise here that what the government stuffs into your pocket through some claim of largesse with its left hand it later reaches in with its right hand and takes it back.

 
 
 
SteevieGee
Professor Silent
2  SteevieGee    last year

It's called tax the rich.   Something we haven't really done since the 50s and early 60s.  You know, the good old days.

 
 
 
Drinker of the Wry
Senior Guide
2.1  Drinker of the Wry  replied to  SteevieGee @2    last year

I recently read that Canada's real GDP per capita has been flat since 2017.  This should get their productivity going.

 
 
 
Greg Jones
Professor Participates
2.3  Greg Jones  replied to  SteevieGee @2    last year

Do you mean income tax, or a tax on wealth?

 
 
 
SteevieGee
Professor Silent
2.3.1  SteevieGee  replied to  Greg Jones @2.3    last year

I think it's based on income Greg.

 
 
 
Hallux
Professor Principal
3  seeder  Hallux    last year

You're one and all off track ... read the first link.

 
 
 
Buzz of the Orient
Professor Expert
4  Buzz of the Orient    last year

I guess NT won't have to worry.  It's nothing but an impossible dream for NT to reach income of 750 million euros.

 
 
 
Sparty On
Professor Principal
5  Sparty On    last year

Meh, just an excuse to collect more tax by our socialist little brother to the north.

Nothing to see here …. Move along …. Move along now …..

 
 
 
Buzz of the Orient
Professor Expert
5.1  Buzz of the Orient  replied to  Sparty On @5    last year

They grab 25% of my meagre pension as well. 

 
 
 
Sparty On
Professor Principal
7  Sparty On    last year

It’s no better up here 

 
 

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