Digital Services Tax Act (S.C. 2024, c. 15, s. 96)

Marginal note:Definitions

25 The following definitions apply in this Division.

bankruptcy day

bankruptcy day, of a taxpayer, means a day on which a trustee becomes the trustee in bankruptcy of the taxpayer. (jour de la faillite)

bankruptcy period

bankruptcy period, of a taxpayer in respect of a bankruptcy day of the taxpayer, means the period during a calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) beginning on the day after the bankruptcy day and ending on the earlier of the day on which the discharge of the trustee is granted under the Bankruptcy and Insolvency Act and December 31. (période de faillite)

bankrupt year

bankrupt year, of a taxpayer in respect of a bankruptcy day of the taxpayer, means any calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) between the calendar year in which the bankruptcy day occurs and the calendar year in which the discharge of the trustee is granted under the Bankruptcy and Insolvency Act. (année de faillite)

business

business includes a part of a business. (entreprise)

pre-bankruptcy period

pre-bankruptcy period, of a taxpayer in respect of a bankruptcy day of the taxpayer, means the period during a calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) beginning on January 1 and ending on the bankruptcy day. (période de pré-faillite)

pre-cease period

pre-cease period, of a taxpayer in respect of a receivership day of the taxpayer, means the period during a particular calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) after the year in which the receivership day occurs beginning on January 1 of the particular calendar year and ending on the day on which the receiver ceases to act as receiver of the taxpayer. (période antérieure à la cessation)

pre-discharge period

pre-discharge period, of a taxpayer in respect of a bankruptcy day of the taxpayer, means the period during a particular calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) after the year in which the bankruptcy day occurs beginning on January 1 of the particular calendar year and ending on the day on which the discharge of the trustee is granted under the Bankruptcy and Insolvency Act. (période antérieure à la libération)

pre-receivership period

pre-receivership period, of a taxpayer in respect of a receivership day of the taxpayer, means the period during a calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) beginning on January 1 and ending on the receivership day. (période antérieure à la mise sous séquestre)

receiver

receiver means a person that

• The following provision is not in force.

  (a) under the authority of a debenture, bond or other debt security, of a court order or of an Act of Parliament or of the legislature of a province, is empowered to operate or manage a business or a property of another person;

• The following provision is not in force.

  (b) is appointed by a trustee under a trust deed in respect of a debt security to exercise the authority of the trustee to manage or operate a business or a property of the debtor under the debt security;

• The following provision is not in force.

  (c) is appointed by a bank or an authorized foreign bank, as those terms are defined in section 2 of the Bank Act, to act as an agent or mandatary of the bank in the exercise of the authority of the bank under subsection 426(3) of that Act in respect of property of another person; or

• The following provision is not in force.

  (d) is appointed as a liquidator to liquidate the assets of a corporation or to wind up the affairs of a corporation.

It includes a person that is appointed to exercise the authority of a creditor under a debenture, bond or other debt security to operate or manage a business or a property of another person, but, if a person is appointed to exercise the authority of a creditor under a debenture, bond or other debt security to operate or manage a business or a property of another person, it does not include that creditor. (séquestre)

receivership day

receivership day, of a taxpayer, means the earliest day on which a receiver

• The following provision is not in force.

  (a) is vested with authority to manage, operate, liquidate or wind up any business or property or to manage and care for the affairs and assets of the taxpayer; and

• The following provision is not in force.

  (b) is in possession of or controls and manages the affairs and assets of the taxpayer. (jour de mise sous séquestre)

receivership period

receivership period, of a taxpayer in respect of a receivership day of the taxpayer, means the period during a calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) beginning on the day after the receivership day and ending on the earlier of the day on which the receiver ceases to act as receiver of the taxpayer and December 31. (période de mise sous séquestre)

relevant assets

relevant assets of a receiver means the part of the properties, businesses, affairs or assets of a person to which the receiver’s authority relates. (actif pertinent)

year in receivership

year in receivership, of a taxpayer in respect of a receivership day of the taxpayer, means any calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) between the calendar year in which the receivership day occurs and the calendar year in which the receiver ceases to act as receiver of the taxpayer. (année sous séquestre)

Marginal note:Trustee as agent or mandatary

26 If a taxpayer has become a bankrupt and a trustee becomes the trustee in bankruptcy of the taxpayer, the trustee is deemed to be the agent or mandatary of the bankrupt for all purposes of this Act and any revenue of the trustee from carrying on the business of the bankrupt is deemed to be revenue of the bankrupt and not of the trustee.

Marginal note:Tax payable for bankruptcy

• The following provision is not in force.

  27 (1) If during a particular calendar year there is a bankruptcy day of a taxpayer,

  • The following provision is not in force.

    (a) section 10 does not apply in respect of the particular calendar year, any bankrupt year or a calendar year during which the pre-discharge period, if any, occurs;

  • The following provision is not in force.

    (b) the taxpayer must pay a tax in respect of the pre-bankruptcy period equal to 3% of the taxpayer’s taxable Canadian digital services revenue for the pre-bankruptcy period determined in accordance with section 31;

  • The following provision is not in force.

    (c) subject to subsection (2), the trustee, and not the taxpayer, must pay a tax in respect of each of the bankruptcy period and, if any, the pre-discharge period equal to 3% of the taxpayer’s taxable Canadian digital services revenue for the period determined in accordance with section 31; and

  • The following provision is not in force.

    (d) subject to subsection (2), the trustee, and not the taxpayer, must pay a tax in respect of any bankrupt year equal to 3% of the taxpayer’s taxable Canadian digital services revenue for the year.

• The following provision is not in force.

  Marginal note:Trustee — exception

  (2) A trustee is not liable for the payment of any amount for which a receiver is liable under section 29.

Marginal note:Filing and payment

• The following provision is not in force.

  28 (1) If section 27 applies in respect of a bankruptcy day of a taxpayer during a particular calendar year,

  • The following provision is not in force.

    (a) sections 45 and 49 do not apply to the taxpayer in respect of the particular calendar year, any bankrupt year or a calendar year during which the pre-discharge period, if any, occurs;

  • The following provision is not in force.

    (b) subject to subsection (2), the trustee must file all returns — in the form and manner, and containing the information, prescribed by the Minister — in respect of any year or period referred to in paragraph 27(1)(c) or (d) for which the trustee is liable to pay tax greater than nil, and pay the tax payable under this Act in respect of the year or period, on or before the day that is 90 days after the last day of the year or period; and

  • The following provision is not in force.

    (c) subject to subsection (2), the trustee must, unless the Minister waives the requirement in writing, file any return that is required to be filed by the taxpayer in respect of the calendar year immediately preceding the particular calendar year or in respect of the pre-bankruptcy period — in the form and manner, and containing the information, prescribed by the Minister — on or before the day that is 90 days after the bankruptcy day.

• The following provision is not in force.

  Marginal note:Trustee — exception

  (2) If there is a receiver with authority in respect of any business, property, affairs or assets of a taxpayer referred to in subsection (1), the trustee is not required to include in any return any information that the receiver is required under section 30 to include in a return.

Marginal note:Tax payable for receivership

29 If during a particular calendar year there is a receivership day of a taxpayer,

• The following provision is not in force.

  (a) if the receiver is a receiver-manager,

  • (i) section 10 does not apply in respect of the particular calendar year, any year in receivership or a calendar year during which the pre-cease period, if any, occurs,

  • (ii) the taxpayer must pay a tax in respect of the pre-receivership period equal to 3% of the taxpayer’s taxable Canadian digital services revenue for the pre-receivership period determined in accordance with section 31,

  • (iii) the receiver-manager, and not the taxpayer, must pay a tax in respect of each of the receivership period and, if any, the pre-cease period equal to 3% of the taxpayer’s taxable Canadian digital services revenue for the period determined in accordance with section 31, and

  • (iv) the receiver-manager, and not the taxpayer, must pay a tax in respect of any year in receivership equal to 3% of the taxpayer’s taxable Canadian digital services revenue for the year; and

• The following provision is not in force.

  (b) in any other case,

  • (i) the receiver must pay

    • (A) a tax in respect of each of the receivership period and, if any, the pre-cease period equal to 3% of the portion of the taxpayer’s Canadian digital services revenue for the period (determined in accordance with section 31) that is online marketplace services revenue, online advertising services revenue, social media services revenue and user data revenue earned by the taxpayer for the period that can reasonably be considered to relate to the relevant assets of the receiver, and

    • (B) a tax in respect of any year in receivership, equal to 3% of the portion of the taxpayer’s Canadian digital services revenue for the year that is online marketplace services revenue, online advertising services revenue, social media services revenue and user data revenue earned by the taxpayer for the year that can reasonably be considered to relate to the relevant assets of the receiver, and

  • (ii) for the purpose of section 10, the taxpayer’s taxable Canadian digital services revenue in respect of the particular calendar year, any years in receivership and a calendar year during which the pre-cease period, if any, occurs is determined as if online marketplace services revenue, online advertising services revenue, social media services revenue and user data revenue of the taxpayer for the year did not include revenue that is included in the portion of Canadian digital services revenue described in clause (b)(i)(A) or (B).

Marginal note:Filing and payment

30 If section 29 applies in respect of a receivership day of a taxpayer during a particular calendar year,

• The following provision is not in force.

  (a) if the receiver is a receiver-manager,

  • (i) sections 45 and 49 do not apply to the taxpayer in respect of the particular calendar year, any year in receivership or a calendar year during which the pre-cease period, if any, occurs,

  • (ii) the receiver-manager must file all returns — in the form and manner, and containing the information, prescribed by the Minister — in respect of any year or period referred to in subparagraph 29(a)(iii) or (iv) for which the receiver-manager is liable to pay tax greater than nil, and pay the tax payable under this Act in respect of the year or period, on or before the day that is 90 days after the last day of the year or period, and

  • (iii) the receiver-manager must, unless the Minister waives the requirement in writing, file any return that is required to be filed by the taxpayer in respect of the calendar year immediately preceding the particular calendar year or in respect of the pre-receivership period — in the form and manner, and containing the information, prescribed by the Minister — on or before the day that is 90 days after the receivership day; and

• The following provision is not in force.

  (b) in any other case, the receiver must file all returns — in the form and manner, and containing the information, prescribed by the Minister — in respect of any year or period referred to in subparagraph 29(b)(i) for which the receiver is liable to pay tax greater than nil, and pay the tax payable under this Act in respect of the year or period, on or before the day that is 90 days after the last day of the year or period.

Marginal note:Non-calendar year periods

• The following provision is not in force.

  31 (1) For the purposes of sections 27 and 29, a taxpayer’s taxable Canadian digital services revenue or Canadian digital services revenue for a pre-bankruptcy period, bankruptcy period, pre-discharge period, pre-receivership period, receivership period or pre-cease period is the taxable Canadian digital services revenue or Canadian digital services revenue of the taxpayer, determined in accordance with Parts 3 and 4, with the following modifications:

  • The following provision is not in force.

    (a) the references in Parts 3 and 4 to “calendar year” (except in the descriptions of E and F in section 24) are to be read as references to “pre-bankruptcy period”, “bankruptcy period”, “pre-discharge period”, “pre-receivership period”, “receivership period” or “pre-cease period”, as the case may be;

  • The following provision is not in force.

    (b) the references in Parts 3 and 4 to “year” (except in the descriptions of E and F in section 24) are to be read as references to “period”;

  • The following provision is not in force.

    (c) paragraphs (a) and (b) of the definition relevant time in section 23 are to be read as follows:

    • The following provision is not in force.

      “(a) the first moment of the first day of the period;

    • The following provision is not in force.

      (b) the last moment of the last day of the period;”

  • The following provision is not in force.

    (d) paragraph (a) of the description of B in section 24 does not apply; and

  • The following provision is not in force.

    (e) subsections 12(2) and (3) do not apply.

• The following provision is not in force.

  Marginal note:Administration and enforcement

  (2) Except as otherwise provided in this Division, Part 6 applies, with any modifications that the circumstances require, to any taxpayer, trustee or receiver in respect of any year or period referred to in this Division.