The tax is a 3% levy on the digital services revenue a company makes from Canadian users above $20 million in a calendar year
A government notice posted online indicated the tax came into effect as of June 28. It will apply for calendar year 2024, with that first year covering taxable revenues earned since Jan. 1, 2022.
The tax is a 3 per cent levy on the digital services revenue a company makes from Canadian users above $20 million in a calendar year. It would apply only to companies with annual worldwide revenue of more than about $1.1 billion.
U.S. lawmakers and government officials view the tax as unfair and have threatened to retaliate if Canada moved forward with it. Legislation including the tax passed last month, but the government had not decided when it would come into force, until now.
Trudeau’s government has noted that at least seven other countries, including the U.K., France, Italy and Spain, already have similar taxes in place.
Canada’s parliamentary budget officer has estimated the tax would raise about $7.2 billion over five fiscal years.
With assistance from Brian Platt