US President Donald Trump is greeted by the Canada Prime Minister Mark Carney when he arrives at the G7 Leaders' Summit in Kananaskis, Alberta, Canada, June 16, 2025.
Stefan Rousseau | About Reuters
Canada has declined its digital service tax “in expectation” of a comprehensive comprehensive trade agreement with the United States, Ottawa said on Sunday evening, just one day before the first tax payments.
The step takes place after US President Donald Trump announced at the weekend that he will “terminate all discussions about the trade with Canada”, in response to Ottawa's decision to impose American technology companies a digital service tax.
“Today's announcement will support a resumption of the negotiations against July 21, 2025. The timeline, which was set on the G7 Leaders' summit of this month in Kananaski,” said Canadian Prime Minister Mark Carney in the explanation.
The first payments of the Canadian digital services tax, which was issued last year and is retrospectively applies to 2022, should be charged on Monday. The tax would have been valid for domestic and foreign technology companies, including US giants such as Amazon, Google and Meta with a delivery of 3%.
This decision from Ottawa was a change by Canadian officials at the beginning of this month, the information
The Canadian finance minister and the national income Francois-Philippe Champagne added: “The lifting of the tax of digital services enables negotiations on a new economic and security relationship with the United States in order to make important progress and strengthen our work to create jobs and build up wealth for all Canadians.”
However, the Canadian Ministry of Finance also explains that Carney was “clear that Canada would take so long, but no longer to achieve this deal”.
The Digital Services Tax was first introduced in 2020 to eliminate a tax gap in which many large technology companies generated significant revenue from Canadians but were not taxed.
Ottawa also said that the tax was issued while working with international partners – including the United States – in a multilateral agreement that would replace the taxes of national digital services.
Scott Bessent, Secretary of the US Ministry of Finance, said CNBC on Friday that the US trade representative Jamieson Greer would examine the tax to “determine the amount of the damage for the US companies and the US economy in general”.
“We don't agree [with the tax]And we think that they discriminate on US companies, “Bessent told Morgan Brennan from CNBC about” Schließbell: overtime “.
“Several countries within the European Union have digital service taxes. None of them did it retrospectively,” said Bessent, who added that the retrospective digital taxes that run around 2 billion US dollars “obviously appear unfairly.”
U.S. goods trade with Canada, according to the US trade representative, was around 762 billion US dollars last year last year.
– Kevin Breuninger from CNBC contributed to this report.
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