Overview

• Canada formally canceled its 3 percent levy on digital service revenues above C$20 million—retroactive to 2022—on June 30, hours before it was due to take effect.
• President Trump had branded the tax a “direct and blatant attack” on the U.S. and threatened $2 billion in tariffs, prompting Canada to suspend negotiations and reconsider the levy.
• Following the repeal, Ottawa and Washington have resumed talks on a long-delayed trade and defense agreement, illustrating how DSTs can be used as leverage.
• France, Italy, Spain and the U.K. continue to enforce their digital services taxes of 2–3 percent, citing domestic revenue needs and national sovereignty despite U.S. objections.
• Efforts by the OECD to forge a global digital tax framework with over 140 countries have repeatedly stalled as disagreements and trade disputes persist.