(Reuters) -The Canada canceled its digital services tax (TSN) on Sunday evening, a few hours before its entry into force, in order to advance commercial negotiations with the United States.
Canadian Prime Minister Mark Carney and US President Donald Trump will resume commercial negotiations to reach an agreement by July 21, 2025, the Canadian Finance Ministry said in a statement.
“The TSN was announced in 2020 to remedy the fact that many large technological companies operating in Canada may not pay taxes on generated income (from Canadian users),” the statement said. “Canada’s preference has always been carried out on a multilateral agreement relating to the taxation of digital services.”
Donald Trump had ended commercial negotiations with Canada on Friday due to the entry into force of the TSN, imposed on all technological companies, including the Americans.
This 3% tax focused on the income of digital services over $ 20 million that a company perceives from Canadian users during a calendar year. Payments had to have a retroactive effect.
(Kanjyik Ghosh in Bangalore and Promit Mukherjee in Ottawa, written by Caroline Stauffer; Camille Raynaud)
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