Budget puts final nail in coffin of digital services tax

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OTTAWA — Legislation to implement the Liberals’ new federal budget will also spell the end of Canada’s ill-fated digital services tax.

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Finance Minister Francois-Philippe Champagne introduced legislation in the House of Commons today to implement measures included in the federal budget, which narrowly passed a vote in the chamber on Monday.

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The formal repeal of the digital services tax is included in the long list of budget measures.

The controversial tax would have seen some U.S. tech giants stuck with hefty retroactive payments ahead of a deadline earlier in June but that ended when Canada halted the tax as part of a bid to restart trade negotiations with the United States.

The tax targeted large multinational corporations like Amazon, Meta, Uber, Airbnb and Google that run digital marketplaces or social media platforms, or otherwise profit from Canadians’ online activity.

Ottawa’s tax — versions of which have been adopted in the United Kingdom and France — was expected to bring in an estimated $7.2 billion over five years, with the first payments retroactive to 2022.

— With files from Anja Karadeglija.

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