Canada Halts and Plans to Rescind Digital Services Tax

The Canadian government announced that it intends to rescind its controversial Digital Services Tax (DST) and has halted the collection of payments that were due at the end of June. The 3% tax on revenues of large digital companies was highly contentious due to its retroactive application to income earned since January 2022, a move that created significant trade tensions with the United States. 

The DST was intended as a temporary measure until a global tax agreement was reached through the OECD. While the government has signaled its reversal, the tax remains legally in force until Parliament formally passes legislation to repeal it, which cannot happen until it returns from recess in September 2025. 

Source: Deloitte