NFTC Asks Canada to Abandon DST Bill

The National Foreign Trade Council said Canada's proposed digital services tax "is clearly discriminatory towards U.S. companies," and the bill's introduction is shortsighted.

NFTC Vice President for International Tax Policy Anne Gordon issued a statement Aug. 4, after the bill's text was published. “We are acutely disappointed with Canada’s decision today to move forward with their plans to impose a DST and their refusal to join the close-to-unanimous Pillar One DST moratorium announced by the [Organisation for Economic Co-operation and Development] Inclusive Framework (IF) members last month," she wrote. "The retroactive application of the measure is also extremely troubling."

U.S. Treasury Secretary Janet Yellen negotiated a tax framework with the OECD that would not allow for DSTs but would allow foreign countries to tax economic activity of companies that do virtual business in their countries and are headquartered elsewhere.

The NFTC asked Canada to reconsider its decision to advance the bill.

The Office of the U.S. Trade Representative had previously threatened to hike tariffs on imports from countries that impose DSTs, using the Section 301 statute.