The series on digital tax issues concludes with the most conventional tax issue: how to ensure that large corporations pay their fair share of income tax for profits generated in Canada (series posts on digital sales tax, Netflix tax, Internet access taxes, digital device taxes, and tax in support of newspapers). The income tax issue was raised by the NDP earlier this year, who called on the government to ensure that Internet companies pay taxes on profits made in Canada.
Post Tagged with: "income tax"
Making Sense of the Canadian Digital Tax Debate, Part 5: Income Tax Reform to Support the News Media
The series on digital tax policy issues has touched on various tax measures that target consumers: digital sales tax, Netflix tax, Internet access taxes, and digital device taxes. The series returns with a post examining a business-focused tax proposal, namely lobbying efforts to amend the Income Tax Act to change the rules on advertising deductions in the hope of shifting ad spending to Canadian media organizations.
The Shattered Mirror, Part Three: Why Income Tax Changes for Digital Advertising Won’t Save Local Media
The third part of my critique of The Shattered Mirror: News, Democracy and Trust in the Digital Age, the Public Policy Forum’s report on the future of media, has taken longer than anticipated. In the interim, there have been some excellent posts on the report, including those from Andrew Potter, Dwayne Winseck, and Marc Edge. The first two parts of my review focused on the copyright and CBC/open licensing recommendations. This post discusses the report’s most significant financial recommendation: reforms to the Income Tax Act that would be designed to increase or capture digital advertising costs with Google and Facebook accompanied by a scheme to create a fund to support Canadian media. The recommendation is similar – though not identical – to one floated by communications law veterans Peter Miller and David Keeble in a report commissioned by the Friends of Canadian Broadcasting (FCB).
At the heart of both reports is the recommendation that advertising purchased on foreign Internet-based media should not be tax deductible. The reports offer a tempting vision for those seeking a simple solution to the struggles of Canadian media organizations. Both posit that much of the problem lies largely with the dominance of Google and Facebook in the digital advertising market. According to the FCB report:
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