Canada Digital Services Tax (DST) Registration Deadline & Key Steps

In June 2024, the news that Canada passed the law allowing the implementation of the Digital Services Tax (DST)starting in 2024 and retroactively applying it to in-scope revenues earned since January 1, 2022, surprised many. Moreover, this decision from the Canadian government led to a dispute with the US government, which claimed that applying these rules is discriminatory and contrary to the United States-Mexico-Canada Agreement (USMCA).

However, as the deadline for submitting DST registration applications for all domestic and foreign companies approaches, the Canadian government has underlined the relevant information to complete this process.

Key Steps for DST Registration

Digital services providers whose global revenue is EUR 750 million and whose Canadian revenue from digital services is CAD 10 million in any calendar year from 2022, regardless of whether they are foreign or domestic companies, must register for DST until January 31, 2025.

To complete the DST registration process, online marketplaces, social media, online advertising, and companies that monetize user data that exceed these thresholds must provide information such as legal name, business number, date and place of incorporation, physical address, mailing address and name and phone number of at least one officer or director.

The application is submitted electronically through the government DST account registration web form. Since all applicants are required to provide their business number, those who do not have one will receive it during the DST registration process.

Once applicants complete the application process and submit the form, it is advisable that they keep a copy of their confirmation number. The confirmation number proves the Canada Revenue Agency (CRA) has received the application.

Conclusion

The DST registration deadline came. Therefore, all the companies that provide in-scope services and exceed the thresholds in any of the previous three years should have submitted their registration forms. However, it is necessary to highlight other relevant deadlines. 

The first is the June 30, 2025, return filing deadline for all reporting years from 2022 to 2024. June 30 is also the deadline for paying the due DST. If the amount of due DST is CAD 10,000 or more, the payment must be made electronically. The exemption is allowed if the taxable persons prove that reasonable circumstances prevent them from making electronic payments.

Source: Government of Canada, VATabout - Canada - Digital Services Tax Act Now In Effect, VATabout - Canada - New Digital Services Tax Caused a Trade Dispute with the US