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

Marginal note:Tax payable

• 10 (1) Every taxpayer must pay a tax in respect of a particular calendar year (other than the first year of application) equal to 3% of the taxpayer’s taxable Canadian digital services revenue for the particular calendar year if

  • (a) the taxpayer

    • (i) had total revenue equal to or greater than the global revenue threshold during a fiscal year of the taxpayer that ended in the immediately preceding calendar year,

    • (ii) was, at any time in the immediately preceding calendar year, a constituent entity of a consolidated group that had total consolidated group revenue equal to or greater than the global revenue threshold during a fiscal year of the group that ended in that immediately preceding calendar year, or

    • (iii) is, at any time in the particular calendar year, a constituent entity of a consolidated group that had total consolidated group revenue equal to or greater than the global revenue threshold during a fiscal year of the group that ended in the immediately preceding calendar year; and

  • (b) at least one of the following conditions is met:

    • (i) the Canadian digital services revenue of the taxpayer for the particular calendar year is greater than the in-scope revenue threshold, and

    • (ii) in respect of any consolidated group of which the taxpayer is a constituent entity at any time in the particular calendar year, the total of all amounts — each of which is the Canadian digital services revenue for the particular calendar year of an entity that is a constituent entity of the group at any time in the particular calendar year — is greater than the in-scope revenue threshold.

• Marginal note:Tax payable for first year of application

  (2) A taxpayer must pay, in respect of the first year of application, a tax equal to the amount determined by the formula

  A + B

  where

  A

  is

  • (a) 3% of the taxpayer’s taxable Canadian digital services revenue for the first year of application, if the taxpayer satisfies the conditions set out in paragraphs (1)(a) and (b) in respect of that year, and

  • (b) nil, in any other case; and

  B

  is

  • (a) the amount determined by multiplying the rate prescribed by regulation in respect of the taxpayer by the total of all amounts each of which is the taxpayer’s taxable Canadian digital services revenue for a calendar year

    • (i) for which the taxpayer satisfies the conditions set out in paragraphs (1)(a) and (b), and

    • (ii) that is after 2021 and before the first year of application, and

  • (b) nil, if no calendar year meets the conditions set out in subparagraphs (a)(i) and (ii).