CCIA Responds to Proposed Digital Services Tax

BY Heather Greenfield
February 22, 2022

Washington — The Computer & Communications Industry Association has offered comments on Canada’s planned Digital Services Tax, which contradicts a global tax reform agreement reached through the OECD at the end of last year.  The Office of the U.S. Trade Representative also announced today that it had filed comments raising serious concerns.

The Canada tax closely mirrors other unilateral measures pursued by European countries in recent years, which have been subject to trade investigations that found the taxes discriminatory against U.S. tech companies and actionable under U.S. law. Canada’s pursuit of a unilateral tax is also inconsistent with Canada’s participation in the OECD/G20 Two-Pillar Solution. As part of the agreement announced in October 2021, parties made a commitment not to enact new discriminatory digital services taxes and instead focus on implementation of the global agreement. 

CCIA previously raised concerns in comments filed with the Department of Finance Canada in 2021 and a joint industry letter to U.S. officials.

The following can be contributed to CCIA President Matt Schruers:

“We encourage Canada to reconsider this new digital tax, which targets specific U.S. companies and undermines the work done by international partners to reach a long-term solution to global tax reform just months ago. Imposing discriminatory taxes on neighboring exporters is not how close allies and trading partners act, and USTR’s concerns should be taken seriously.”

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