Post Tagged with: "sales tax"

National Sales Tax by Steve White https://flic.kr/p/7TRPK1 (CC BY-NC-SA 2.0)

Quebec Digital Sales Tax Bill Demonstrates the Complications That Come With Implementing a “Netflix Tax”

The public policy battle over a digital sales tax to cover services such as Netflix continues in Canada with the introduction last week of a Quebec private members bill that would require the collection and remission of provincial sales tax by “persons with a significant online presence.” I’ve already written extensively about the longstanding policy work on digital sales taxes, the misleading claims about a level playing field, and how Canadian subscribers can pay the sales tax on Netflix today if they so choose. While there is an inevitably about digital sales taxes – it will come once global standards are sorted out – some still want the tax now without much regard for the challenges of implementation.

Read more ›

November 6, 2017 2 comments News
GST/HST Return, CRA, https://www.canada.ca/content/dam/cra-arc/migration/cra-arc/E/pbg/gf/gst59/gst59-17e.pdf

Think There Should be a Netflix Tax?: Why There is Nothing Stopping Canadian Subscribers From Paying Today

The ongoing furor over Netflix taxes remains one of oddest and most poorly understood public policy debates in recent memory. Part of the problem is that a “Netflix tax” has long been used to mean different things to different people. When first raised by the Conservative government, the issue had nothing to do with sales tax. Rather, a “Netflix tax” was a reference to a mandated contribution to help fund Canadian content, a position supported by various cultural groups and some provincial governments. The no-Netflix tax position took hold, however, and all three major parties adopted the position that they would not mandate contributions from online service providers such as Netflix.

More recently, the debate has shifted to Netflix tax as a sales tax with the goal of creating a “level playing field.” I tried to debunk the level playing field claims in this post and on Canadaland, but the claims of the need for a level playing field and sales tax continues. Yesterday, the NDP stated:

Read more ›

October 11, 2017 3 comments News
Mentre tassisti (e teppisti) devastano Roma, Uber è sempre più utilizzato by Automobile Italia (CC BY 2.0) https://flic.kr/p/SoruaR

C’mon Uber: Sales Taxes on Uber Rides Are Not a “Tax on Innovation”

Yesterday’s federal budget included plans to amend the law to ensure that GST/HST is applicable to ride sharing services such as Uber. The budget states that the government will:

Amend the definition of a taxi business under the Excise Tax Act to level the playing field and ensure that ride-sharing businesses are subject to the same GST/HST rules as taxis.

This change should not be particularly controversial. No one likes paying taxes, but equal application of sales taxes ensures appropriate revenue collection and a level-playing field for all businesses in the sector. As I noted in an earlier post, I expect that this is a first step toward extending requirements to collect and remit sales taxes on foreign digital services such as Netflix and Spotify.  Applying sales taxes to all foreign digital services is complicated – there needs to be thresholds implemented to ensure that administrative costs do not outweigh revenues collected – but Uber is well established in Canada with many local jurisdictions establishing a regulatory framework for the service.

Read more ›

March 23, 2017 8 comments News
Tax by Phillip Ingham (CC BY-ND 2.0) https://flic.kr/p/wysZd

Not Exactly a Netflix Tax: Where Canada Stands on a Digital Sales Tax

The CBC’s report that the Canadian government is considering extending goods and services sales taxes to foreign-based digital services has sparked yet another round of articles and coverage of a possible “Netflix tax.” Some Conservative MPs were quick to pounce with claims the Liberals are pursuing a Netflix tax, yet the reality is a bit more complicated. At issue is not the culture contributions payment that is often called a Netflix tax. Despite calls for that form of Netflix tax, Canadian Heritage Minister Melanie Joly has been consistent in saying that the government will not extend mandatory Cancon contributions to Netflix.

In fact, this proposal is not targeted specifically at Netflix at all. Rather, it envisions the possibility of extending GST/HST to foreign-based digital services that are currently exempt from collecting and remitting sales taxes. While the law technically requires Canadian consumers to self-declare the sales tax they owe on those purchases, few are aware of the requirement and presumably even fewer actually do it.

Read more ›

January 18, 2017 7 comments News