CANADA NEWS: Canada plans digital tax in 2022 for global tech giants like Facebook, Google

The threat of digital services taxes has sparked threats of retaliation for the administration of outgoing US President Donald Trump.

Canada plans to impose tariffs on digital service providers from 2022 that will remain in place until major countries come up with a more formal tax system, the Treasury said on Monday.

The Organization for Economic Cooperation and Development works in a general way to ensure that digital behemoths, such as Alphabet Inc’s Google and Facebook Inc, pay their share of taxes as the budget coronavirus hammer.

The threat of digital services taxes has sparked threats of retaliation for the administration of outgoing US President Donald Trump.

The new tax will take effect on January 1, 2022, and will remain in place until agreed in the normal way. The estimate will increase the organisation’s revenue by C $ 3.4 billion ($ 2.6 billion) over five years, from the 2021-22 financial year.

“People in Canada want a fair tax system, where everyone pays their fair share,” Finance Minister Chrystia Freeland told lawmakers during a review of the economy.

Foreign merchants who do not have access to Canada will also have to start collecting sales tax on products such as mobile apps, online video gambling and streaming. The estimate should raise C $ 1.2 billion over five years.

Ottawa also plans to force people who rent temporary accommodation to pay sales tax, saying popular digital rental platforms currently do not have to pay taxes. That puts hotels at risk, he adds.

The government has also reduced the stock options prize to prevent “high-paid people employed in large, long-term, mature companies” from exploiting profits.

From now on, an annual limit of C $ 200,000 will apply to stock options for those individuals. Ottawa did not provide a definition of high-income people or mature firms.

The rules will not apply to startups or emerging companies, which are often unable to pay competitive wages rather than offer stock options. The new rules will generate about C $ 200 million in corporate revenue, the Treasury said.

Recent Articles

Related Stories

Leave A Reply

Please enter your comment!
Please enter your name here

Subscribe Us Get the daily news in your inbox