Despite significant political headwinds, particularly from the United States, Canada’s digital services tax (DST) was enacted pursuant to an order-in-council dated June 28, 2024. The DST is an annual 3% tax on digital services revenue that is considered attributable to Canada. Taxpayers’ DST liability for 2024 will include DST applicable to digital revenues from 2022 and 2023. 

To learn more about the DST, please see Blakes Bulletin: The Mechanics of Canada’s New Digital Services Tax.

The DST was enacted shortly after Parliament passed Bill C-59 and Bill C-69, which both received royal assent on June 20, 2024. Bill C-59 and Bill C-69 implemented certain tax measures contained in the 2023 Fall Economic Statement and the 2023 and 2024 Federal Budgets. 

Bill C-59 contains the full text of the DST legislation and other significant measures, including amendments to the General Anti-Avoidance Rule (GAAR) and the introduction of the share buyback tax and the excessive interest and financing expenses limitation (EIFEL) rules. Bill C-69 contains Canada’s new Global Minimum Tax Act and amendments to the alternative minimum tax regime announced in the 2024 Federal Budget. 

To learn more about Bill C-59 and Bill C-69, please see Blakes Bulletin: Select Tax Measures in Canada’s Bill C-59 and Blakes Bulletin: 2024 Federal Budget: Selected Tax Measures.