Canadian Prime Minister Justin Trudeau’s Liberal Party has proposed in its reelection platform to introduce a new 3% tax on the income large businesses operating in the digital economy.
According to the proposal’s cost estimate, the new policy would replicate the proposed digital services tax announced by the French government, hitting targeted advertising services and digital intermediation services. The new tax would be implemented on April 1, 2020.
The Canadian digital services tax would apply only to businesses with worldwide revenues of at least CAN billion (USD 1.1 billion) and Canadian revenue of more than CAN 40 million (USD 43.8 million), the cost estimate states.
The Liberal party’s plan, outlined in Forward – A Real Plan for the Middle Class, states that the government would make sure that multinational tech giants pay corporate tax on the revenue they generate in Canada.
Canada will also work the OECD to “ensure that international digital corporations whose products are consumed in Canada collect and remit the same level of sales taxation as Canadian digital corporations.,” should the Liberals succeed in the October 21 election.
Further, the party promised to “crack down on corporate tax loopholes that allow companies to excessively deduct debt to artificially reduce the tax they pay.”
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