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Canada Must Pass Law to Repeal Digital Services Tax Before Tech Firms Receive Refunds

Prime Minister Mark Carney’s government has reopened negotiations with President Trump’s administration to secure a trade deal by July 21.

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Ottawa rescinded the digital services tax after U.S. President Donald Trump's announcement that he was ending trade talks with Canada over the tax.
Minister of Finance and National Revenue François-Philippe Champagne speaks to reporters ahead of a cabinet meeting on Parliament Hill in Ottawa, on Tuesday, June 10, 2025. THE CANADIAN PRESS/Spencer Colby
"This tax? Don't worry about this tax."

Overview

  • Canada scrapped its 3 percent digital services tax on June 30 to bring the United States back to the negotiating table under a July 21 trade deal deadline.
  • The Canada Revenue Agency confirmed it collected some retroactive revenue since 2022 but cannot issue refunds until Parliament formally repeals the levy, with MPs returning on Sept. 15.
  • CRA waived the requirement for companies to file DST returns ahead of the June 30 deadline and will halt any related payments until a repeal bill is passed.
  • President Trump threatened Section 301 tariffs over the DST and retains the option to impose punitive measures if negotiations falter.
  • Canada’s reversal underscores how unilateral digital taxes have become leverage in stalled OECD talks on global tech taxation.