Canada 3% Digital Services Tax Jan 2024

August 30, 20230

Type: Legislation proposal

Canada has enforced updated Digital Services Tax (DST) legislation due to the lack of OECD reform accord. Effective now, the 3% DST applies to major firms from 2024, retroactive to Jan 1, 2022. Comments on the proposal are welcome until Sep 8, 2023. 

Unlike five countries, Canada declined the 1-year freeze post OECD talks’ Pillar 1 agreement. Should these talks succeed by Dec 31, 2023, Canada might reconsider. Active from Jan 1, 2022, the tax targets income from Canadian users, covering digital ads, online markets, social media, and user data sales. An optional simplified 2023-2023 calculation assists business adjustment. 

For applicability, consider exceeding €750m global revenues (per OECD) or CAD 20m Canadian revenues. Notably, Canada previously imposed 5% GST on digital services sales since Jan 1, 2021. Track global trends via VAT Calc’s Digital Services Tax Tracker. Stay informed for compliant operations. 


Effective date: Jan 2024 



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