Freeland’s optimism about OECD tax deal on digital services ‘has increased a lot’

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TORONTO — Finance Minister Chrystia Freeland says the government’s new digital services tax on large corporations is a step forward as Ottawa works toward a multilateral agreement it hopes to reach with other countries.

Freeland said during a post-budget conversation with the Canadian Chamber of Commerce that she’s increasingly optimistic such a deal can be reached after discussing it with U.S. Treasury Secretary Janet Yellen and their European counterparts.

Monday’s federal budget outlined plans to put a three-per-cent tax on revenues from digital services that rely on data and content contributions from Canadian users. It would take effect Jan. 1 of next year and is projected to raise $3.4 billion in tax revenue over five years.

The tax would apply to businesses with gross revenue of at least 750 million euros, which Freeland says is about $1.125 billion Canadian dollars.

The government had indicated in December’s fiscal economic update that it planned to work on a digital tax with the OECD, a multilateral organization that includes the United States and other large economies.

Freeland says Canada’s proposed tax would later “dovetail” with any OECD measures.

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