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Canada's Finance Minister Chrystia Freeland has proposed a digital tax: if enacted, the draft law would impose a 3% digital sales tax as of 1 January 2024, on revenues earned from 2022 onwards, but only if the OECD global tax rules are not yet in force by that time.
In the statement, the spokesperson of the Office of the United States Trade Representative (USTR), Adam Hodge, said that Canada's proposed tax rules 'would create the possibility of significant retroactive tax liabilities with immediate consequences for US companies. If Canada adopts a DST, USTR would examine all options, including under our trade agreements and domestic statutes.'
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