US expresses “concern” over proposed Canadian tax on tech giants, Telecom News, ET Telecom
In its federal budget presented in mid-April, the Canadian government confirmed its intention to tax, from January 2022, internet platforms offering services in Canada in the absence of international regulations.
This three percent tax on digital services targets companies with gross revenues of over US $ 900 million in global trade. The measure is expected to bring in C $ 3.4 billion over five years and will apply until an “acceptable” multilateral agreement replaces it, Ottawa said.
Tai “has expressed concern about Canada’s recently proposed digital services tax,” according to a statement from the US Trade Representative’s office.
At the international level, the Organization for Economic Co-operation and Development (OECD) is currently studying reforms to modulate corporate income tax according to the profits made in each country, regardless of their country of origin.
This would target in particular the digital giants, which often pay taxes disproportionate to the income and profits they generate locally.
The OECD wants to obtain a global agreement in principle at the G20 Finance on July 9 and 10, then at a final meeting in October.
The US representative and the Canadian minister also discussed the protracted dispute over Canadian softwood lumber. Washington believes that this wood is sold below market price to encourage exports.
And Washington has imposed countervailing duties that Ottawa considers “unfair” and “unjustified”. The case went to the World Trade Organization (WTO), which ruled in favor of Canada, but the United States appealed the decision in September 2020.
Tai and Ng “agreed to continue working together to resolve these and other issues, and to maintain an open line of communication,” the USTR statement said.