The Canadian government announced on the 30th that it plans to impose digital taxes on global IT companies that provide digital services such as Google and Facebook. Canada plans to impose the new digital tax starting in 2022.
According to Reuters, Canada’s Finance Ministry announced the plan. Saying it was concerned about the delay in international agreements on digital taxes.
Reuters reported that Canada will apply the tax before a new international agreement reached. Adding that it can collect 3.4 billion Canadian dollars ($2.6 billion) in digital taxes over the next five years.
The Google tax, a digital tax coming up in Canada for tech giants
The digital tax, also called the “Google tax,” is a tax levied on digital companies that serve across borders without physical fixed workplaces. The GAFA, taken after the initials of Google, Amazon, Facebook, and Apple, are the “tech giants” of the U.S..
The international community has already discussed how to introduce the digital tax in earnest with the Organization for Economic Cooperation and Development at the center since last year. But they haven’t reached any agreement as the U.S. strongly opposes it.
In particular, the U.S. stopped participating in the digital tax negotiations through the OECD in June because it discriminates against its IT giants. And the Donald Trump administration opposed the move to introduce the digital tax, pushing retaliatory tariffs.
However, the move to enforce the digital tax by each country is also significant. Reportedly. the French government notified companies subject to digital tax taxation on the 25th of last month. France has a determination to impose a digital tax set by its government from December this year. Unless they reach an agreement at the OECD.
Digital service tax is not uncommon. Several countries have imposed this tax. Because the digital companies nowadays earn much more many to categorize them under common tax.
