Canada rescinds digital services tax to advance trade negotiations with US

By Efe Ozkan

ISTANBUL (AA) - Canada announced Sunday that it would rescind its digital services tax (DST) and resume negotiations with the US with a view towards reaching a trade deal by July 21.

“Today’s announcement will support a resumption of negotiations toward the July 21, 2025 timeline set out at this month’s G7 Leaders’ Summit in Kananaskis,” Canadian Prime Minister Mark Carney said in a statement.

“In our negotiations on a new economic and security relationship between Canada and the United States, Canada’s new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses,” he said.

Canadian Finance Minister Francois-Philippe Champagne echoed Carney’s statement.

“Rescinding the digital services tax will allow the negotiation of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians,” he said.

The statement also said that Champagne would soon bring forward legislation to rescind the DST.

The DST requires foreign and domestic large businesses to pay tax on certain revenue earned from engaging with online users in Canada if they meet certain conditions, according to the Canadian government’s website.

Canada’s decision comes after US President Donald Trump announced on June 27 that the US would terminate trade negotiations with Canada because of the DST.

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” Trump said previously.