Summary
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Canada’s 3% Digital Services Tax—enacted in June 2024 and applied retroactively to 1 January 2022—was rescinded on 29 June 2025, hours before the first major payments were due, to advance trade negotiations with the United States. Bill C-15, the budget implementation bill formally repealing the Digital Services Tax Act retroactive to enactment, passed third reading in the House of Commons on 26 February 2026. Early payers are receiving refunds with interest. [canada.ca], [smartsmsso…utions.com]
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The DST targeted large domestic and foreign platforms with global revenue of €750 million-plus and Canadian digital-services revenue above CAD 20 million, across online marketplaces, targeted advertising, social media and user-data monetisation. It was a gross-revenue levy (more like an income tax than a consumption tax), and the Parliamentary Budget Officer had estimated it would raise about CAD 7.2 billion between 2023 and 2027 before US retaliation and Section 899 pressure prompted its withdrawal. [smartsmsso…utions.com], [whtcalculator.com]
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Repeal does not eliminate Canadian tax obligations for digital businesses. GST/HST on digital products and services remains fully in force: non-resident sellers and platform operators must register under the simplified regime once sales to Canadians exceed CAD 30,000 over 12 months. Provincial sales taxes (such as BC’s PST on cloud/software) and income tax also continue. Companies that provisioned for DST liability should assess reversing those provisions for reporting purposes. [sterlinxglobal.com], [salaccounting.ca]
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