In a move to facilitate ongoing trade negotiations with the United States, Canada has announced it will rescind its Digital Services Tax (DST). The decision, announced by Finance Minister François-Philippe Champagne, is aimed at advancing discussions on a new economic and security partnership with the U.S. Prime Minister Mark Carney and U.S. President Donald Trump have agreed to resume negotiations, targeting a deal by July 21, 2025.
The DST, introduced in 2020, was designed to ensure that large tech companies operating in Canada paid taxes on revenue generated from Canadian users. However, Canada had always preferred a multilateral approach to digital services taxation, working with international partners, including the U.S., to reach a broader agreement. The rescinding of the DST, which will halt collections starting June 30, 2025, is seen as a step toward achieving that goal.
Minister Champagne also indicated that legislation to formally repeal the Digital Services Tax Act will be introduced soon. This move is part of Canada’s broader strategy to secure the best deal for Canadian workers and businesses as it navigates complex trade discussions with its southern neighbor.
