Overview of Canada’s Digital Services Tax Act and Implications for Large Businesses

• The Digital Services Tax Act (DSTA) aims to tax large domestic and foreign businesses on their Canadian digital services revenue
• The Digital Services Tax (DST) was passed with Royal Assent on June 20, 2024, with retroactive effect to Jan. 1, 2022
• DST applies to large businesses with total revenue exceeding €750 million and generating at least $20 million of “In-Scope” Canadian revenue
• DST applies at a rate of three per cent on certain revenue earned by large businesses in excess of $20 million CDN in a calendar year
• In-Scope revenue includes online marketplace services, online advertising services, social media services, and user data
• Businesses meeting the €750 million threshold and earning more than $10 million CDN of Canadian digital services revenue must register for the DST
• Detailed analysis is required for businesses part of a consolidated group with global revenue exceeding €750 million and Canadian In-Scope revenue exceeding $20 million

Source: bakertilly.ca

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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