Canada’s government has mandated that large businesses whose online revenues are above specific thresholds must register for a Digital Services Tax (DST) programme account by 31 January 2025, and file and pay their first DST returns by 30 June 2025.
Businesses can now register for a DST programme account through the Canada Revenue Agency (CRA) portal.
A foreign or domestic business must apply to register for a DST programme account for any one of the 2022, 2023 or 2024 calendar years:
- The business had Canadian digital services revenue greater than nil in the calendar year
- The business had, or was a member (in the calendar year or in the prior calendar year) of a consolidated group that had, total revenue of at least EUR 750 million during a fiscal year that ended in the prior calendar year
- The business had, or was a member (in the calendar year) of a consolidated group that had, Canadian digital services revenue greater than CAD 10 million in the calendar year.
The Digital Services Tax Act received royal assent on 20 June 20 2024 and came into force on 28 June 2024. The DST imposes a 3% tax on revenue from digital services and user data sales involving Canadian users, targeting large businesses.
When filing the first DST return, affected businesses must include DST owed on online revenues earned since 1 January 2022.
Businesses that fail to meet registration, filing, or compliance requirements may face penalties and interest.
