Canada stops the digital tax on technology giants amid American trade negotiation pressure

The Canadian government canceled the digital services tax that is scheduled to enter into force on Monday after the President Donald Trump He threatened to violate trade negotiations between the United States and Canada due to the tax.

The Canada government has adopted a 3 % digital services tax and the groups are scheduled to start on Monday. The tax was applied to large technology companies that have achieved more than $ 20 million annually from online market services, online ads, social media services and some user data sales that include sharing with users in Canada.

The digital services tax will be applied regardless of whether the company is based in Canada, and it would have been applied retroactively until 2022, which puts a billion dollar tax burden on the major American technology companies that carry out business in Canada.

Digital services tax in Canada The retreat of the Trump administration and the Biden Administration, which was in office when it was initially placed and said that the proposed tax was inconsistent with a current trade agreement. Technology companies such as Amazon, Meta, Google and Apple have opposed tax.

Canada to resume commercial talks with us after canceling the digital services tax

Trump said on Friday that he will stop trade talks between the United States and Canada, as he closed the North American neighbor as a “very difficult country in trading” The tariff rate In the next seven days.

The Canadian government announced on Sunday that it will catch the digital services tax, and stop Tax groups It is scheduled to start on Monday while the legislation is being prepared to officially cancel the parliament. He added that it is preferable to reach an agreement with other countries on digital services taxes.

Canada responds after Trump stopped commercial conversations about digital services tax

“Dest was announced in 2020 to address the fact that many large technology companies operating in Canada may not pay a tax on the revenue resulting from Canadians,” Canada Finance Ministry said in a statement. “Canada’s preference has always been a multilateral agreement on imposing taxes on digital services.”

Prime Minister Mark Carney added: “In our negotiations on a new economic and security agreement between Canada and the United States, the new government will always direct the comprehensive contribution to any possible agreement for the interests of workers and Canadian companies.”

The United States is Canada The largest commercial partnerWhile Canada is the largest importer of American exports and one of the three best sources of US imports.

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American and Canadian governments previously agreed on a deadline on July 21 for commercial negotiations. The United States and Mexico-Canada Convention (USMCAIt is scheduled to be re -negotiated by next year.

Reuters contributed to this report.