TORONTO — A set of proposed taxes on foreign technology companies that do business in Canada would have little to no immediate effect on subscribers to foreign digital services like Netflix, experts say.
Tax analysts explain that the Liberals seem to be contemplating two different kinds of new taxation aimed at large multinational technology companies, but the party’s platform only provides a timetable for one of them.
That’s a new kind of three per cent tax on certain corporate revenue generated in Canada — what the Liberals describe as “the sale of advertising and user data” — starting next spring.
C.D. Howe policy analyst Rosalie Wyonch says Netflix doesn’t sell advertising and may not be subject to the three per cent tax on revenue that the Liberals say they’d levy on large foreign companies starting in April 2020.
KPMG tax partner Walter Sisti has a similar view and says the Liberals haven’t announced plans to follow the lead of Quebec, Saskatchewan and some foreign jurisdictions by imposing a federal sales tax on digital services.
Both tax experts noted that the Liberals say they’ll “work to achieve” the goal of levelling the playing field for Canadian digital service providers, which are already required to collect sales tax for the federal government and some provinces.