Canadian PM rules out B2C digital services tax

Thu 13th Aug 2015

The Canadian Prime Minister, Stephen Harper, has ruled out a B2C digital services tax if his Conservative Party wins reelection in the autumn.  Canadian GST is currently 5%, with an additional provincial tax on top which can take the total bill to 15%.

A number of countries have recently introduced VAT or other sales taxes on foreign providers of e-services (including: streaming video and music; apps; software; subscription to online journals; and membership fees to sites or dating website). South Africa levied 14% VAT on such digital services in 2014. South Korea just introduced 10% GST foreign digital service providers from July 2015. Japan is next, levying 8% Consumption Tax from 1 October 2015.

The European Union changed the country VAT rate rules on these taxable supplies at the begging of 2015. EU providers are now required to charge and remit the VAT of their consumers’ home countries.