Canada will revoke the US digital service tax (tribute to online companies) on the US, according to government statement on Sunday night (29), in an attempt to resume commercial negotiations with the United States.
US President Donald Trump, blaming the tax, which he called “a direct and flagrant attack on our country.”
In a note published on Sunday night, the Canadian government said it was giving up the tax to help bring countries back to the negotiating table.
“To support these negotiations, the Minister of Finance and National Revenue, François-Philippe Champagne, announced today that Canada would revoke the Digital Services Tax, in anticipation of a comprehensive and mutually beneficial trade agreement with the United States,” the statement.
“In line with this action, Prime Minister Carney and President Trump agreed that the parties will resume negotiations to reach an agreement until July 21, 2025,” he added.
Digital service taxes are a way for countries to tax services online, in contrast to taxes on physical products.
He has classified rates like what he calls “non -tariff trade barriers,” forms for other countries to restrict competition within their borders – often, he said, at the expense of US companies.
The Canadian tax would come into force on Monday (30). The digital rate planned by Canada was 3% of digital service revenue that a company receives from Canadian users over $ 20 million in a calendar year, and payments would be retroactive to 2022.
This would have impacted US technology giants, including Amazon, Meta, Google, Apple, among others.
Canada and USA are important business partners, but Trump broke this relationship shortly after returning to office in January.
Canada is the largest buyer of American products, importing $ 349 billion last year, according to data from the Department of Commerce. Meanwhile, he sent him $ 413 billion in goods to the US last year, the third largest source of foreign products.
(With information from Reuters)
