Canada dropping tax on US tech giants under pressure from US President Donald Trump is fuelling concern about the future of such levies in other countries, particularly in Europe. The first payment for Canada's Digital Services Tax (DST) was supposed to be due Monday.
The tax, which was passed into law last year by the Trudeau govt, was meant to charge 3% of the digital services revenue a firm makes from Canadian users above $14.6 million in a calendar year.
After Trump on Friday said he was ending all trade discussions with Canada, its finance minister Francois-Philippe Champagne said in a social media post late Sunday: "Rescinding the DST will allow the negotiations to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians."
Currently, about half of all European OECD countries have either announced, proposed, or implemented a digital services tax pending global action, said the Tax Foundation, a think tank which supports the introduction of such taxes. But the future of such measures is unclear after the Group of Seven nations agreed Saturday to exempt US multinational companies from a global minimum tax imposed by other countries. The US and fellow G7 nations signed off on an agreement aimed at averting a global tax war, by creating a "side-by-side" system that would exempt US companies from some elements of an existing global agreement.
Reacting to the developments, Nobel winning economist Joseph Stiglitz said: "This is about more than trade - it's about whether democratically elected govts can regulate and tax powerful corporations or whether tech billionaires can dictate policy through political proxies."
The tax, which was passed into law last year by the Trudeau govt, was meant to charge 3% of the digital services revenue a firm makes from Canadian users above $14.6 million in a calendar year.
After Trump on Friday said he was ending all trade discussions with Canada, its finance minister Francois-Philippe Champagne said in a social media post late Sunday: "Rescinding the DST will allow the negotiations to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians."
Currently, about half of all European OECD countries have either announced, proposed, or implemented a digital services tax pending global action, said the Tax Foundation, a think tank which supports the introduction of such taxes. But the future of such measures is unclear after the Group of Seven nations agreed Saturday to exempt US multinational companies from a global minimum tax imposed by other countries. The US and fellow G7 nations signed off on an agreement aimed at averting a global tax war, by creating a "side-by-side" system that would exempt US companies from some elements of an existing global agreement.
Reacting to the developments, Nobel winning economist Joseph Stiglitz said: "This is about more than trade - it's about whether democratically elected govts can regulate and tax powerful corporations or whether tech billionaires can dictate policy through political proxies."
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