About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (August 1, 2024)

handle is hein.crs/goveqex0001 and id is 1 raw text is: Canada's Digital Services Tax Act: Issues Facing Congress August 1, 2024 In June 2024, the Canadian government enacted Bill C-59, which included a 3% digital services tax (DST)-retroactive to January 1, 2022-on certain revenue of large digital services providers active in, for example, online marketplaces, online advertising, social media platforms, and the sale or licensing of user data. Some Members of Congress have expressed concerns that Canada's DST discriminates against U.S. firms and have urged the Biden Administration to consider retaliatory trade measures. The United States is home to several of the world's largest digital services providers (e.g., Meta, Netflix), which are a large and fast-growing segment of the U.S. economy, with $213 billion of revenue and 278,000 workers in 2024. Revenue for social networking sites is expected to increase by 18% from 2024 to 2025. Digital services providers will have to register with the Canadian Revenue Agency by January 31, 2025, and make their first tax payments by June 30, 2025. Background and Scope of the DST In addition to Canada, 18 other countries have implemented DSTs. DSTs differ from existing corporate income taxes on multinationals. DSTs are taxes on revenue derived from the sale of digital goods and services in the jurisdiction imposing the tax. The existing global tax regime taxes multinationals' profits (revenue adjusted for expenses) in the country in which the income is earned and, in some instances, the country in which a parent firm is headquartered. Proposals for DSTs are increasingly common in part because they allow governments to tax multinationals providing digital services even if the firm does not generate income through the ownership of assets in their jurisdiction. In October 2021, members of the Organization for Economic Co-operation and Development (OECD)/Group of 20 (G20) Inclusive Framework, including the United States and Canada, agreed on a plan to update the global tax system to address profit shifting and develop an international digital tax framework. In July 2023, 138 out of 145 framework members agreed to hold off on imposing DSTs until at least 2025 to allow for additional framework negotiations. Canada was an exception, stating that it would not support a DST moratorium without a firm and binding implementation timeline for the framework. Congressional Research Service https://crsreports.congress.gov IN12399 CRS INSIGHT Prepared for Members and Committees of Congress

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Already a HeinOnline Subscriber?

Log In

profiles profiles most