Google has announced that it will be implementing a surcharge for ads served in Canada to help cover Ottawa’s new Digital Services Tax (DST).
Starting from October 1, 2024, a new ‘Canada DST Fee’ surcharge will be added to invoices or statements for ads served in Canada, as stated in a
recent email sent to online creators by Google.
This new 2.5 percent fee will apply to all ads served in Canada, with Google explaining on its
Google Ads Help webpage that the DST charge is necessary to cover compliance costs with the Digital Services Tax legislation in Canada.
The DST, a 3 percent levy targeting foreign companies, particularly those from the United States, receiving revenue from Canadian subscribers and contributors, is expected to generate
$7.2 billion over the next five years, according to Canada’s Parliamentary Budget Officer.
In October 2021, the Canadian
government initially agreed to delay the tax implementation until the end of 2023. However, the tax came into effect in January 2024, retroactive to the start of 2022, as Ottawa decided not to extend the deferral period to avoid being disadvantaged compared to countries with existing DSTs.
The United States has expressed concerns over Canada’s refusal to delay the DST, advocating for a unified minimum tax level to prevent multinational companies from exploiting tax rules.
University of Ottawa law professor Michael Geist highlighted that Canada’s individual approach to the DST may result in costs being passed on to Canadian businesses and consumers.
Deputy Prime Minister Chrystia Freeland defended the new tax scheme during a press conference, citing similar taxes in countries like the UK and France and emphasizing the need to prevent Canada from being in a disadvantaged position.