Canada scraps digital services tax

The Canadian Ministry of Finance announced on June 29 that it would cancel the digital service tax originally scheduled to take effect on June 30 to advance trade negotiations with the United States.

The Canadian Ministry of Finance said in a press release that Canadian Prime Minister Carney and US President Trump have agreed that the two sides will resume negotiations in order to reach an agreement by July 21.

The United States has been opposed to Canada’s plan to impose a digital service tax and tried to put pressure on it to stop it. Canadian Finance Minister Francois-Philippe Champagne once said that the plan would not be postponed. According to the plan, the Canadian government will impose a 3% tax on the revenue of technology companies that provide digital services to Canadian users or sell Canadian user data, and it will be retroactive to the revenue of the relevant companies in 2022.

Trump announced on social media on June 27 that the United States decided to immediately stop all trade negotiations with Canada because Canada insisted on launching a digital service tax targeting US technology companies.