Canada rescinds Digital Services Tax after Trump cuts off U.S. trade talks

Ottawa said on Sunday night that Canada has returned to digital service tax with “expectation of a comprehensive trade regulation with the United States.

The movement comes after US President Donald Trump’s announcement that Ottawa will “end all debates about trade with Canada,” in response to the decision of the US technology companies to implement a digital service tax.

Canada Prime Minister Mark Carney said in a statement, “Today’s announcement will support the restart of the negotiations on July 21, 2025, the G7 leaders of this month are indicated at the summit of Kananaskis.” He said.

This decision from Otawa was a transformation from the Canadian authorities at the beginning of this month, It wouldn’t pause the digital service taxDespite a strong opposition from the USA

“Cancellation of digital service tax, a new economic and security relationship with the United States will allow the negotiations of a new economic and security relationship with the United States to make vital progress and to create business and prosperity for all Canadians,” Canada Finance and Revenue Minister Francois-Philippe Champagne said.

However, the statement from the Ministry of Finance of Canada, Carney’in “Canada need to achieve this agreement, but it is clear that it will no longer take,” he said.

The first payments from Canada’s digital service tax, which came into force last year and applied backwards to 2022, will start on Monday.

Tax, Amazon, Google and Meta, including US giants, including both domestic and foreign technology companies would apply with 3% tax.

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