Explanatory Notes Relating to the Digital Services Tax Act and Other Legislation

Preface

These explanatory notes describe legislative proposals to repeal the Digital Services Tax Act and the Digital Services Tax Regulations and to make related amendments to other legislation. These explanatory notes describe these legislative proposals, clause by clause, for the assistance of Members of Parliament, taxpayers and their professional advisors.

The Honourable François-Philippe Champagne, P.C., M.P.
Minister of Finance and National Revenue

These notes are intended for information purposes only and should not be construed as an official interpretation of the provisions they describe.

Part 2 – Digital Services Tax (Repeals and Other Measures)

Clause 126

Repeal of the Digital Services Tax Act (DSTA)

DSTA

The DSTA is retroactively repealed, effective as of June 20, 2024, the date of its original enactment.

Clause 127

Repeal of the Digital Services Tax Regulations (DSTR)

DSTR

The DSTR are retroactively repealed, effective as of June 20, 2024, the date they were originally made.

Clause 128

Refunds of Digital Services Tax Payments

For those taxpayers that have already made digital services tax payments to the Canada Revenue Agency, these payments will be refunded with interest at the rate that is generally applicable to corporate tax refunds. The rate in the DSTRs cannot apply since they are retroactively repealed. As such, these rules reference the rate determined under paragraph 2(1)(a) of the Interest Rates (Excise Act, 2001) Regulations. This rate is aligned with other Canadian tax statutes. Interest is payable from the day the payment was received by the Receiver General to the day that the refund is paid.

Amendments Consequential to the Repeal of the DSTA

Clause 129

Access to Information Act
Schedule II

Consequential to the repeal of the DSTA, Schedule II of the Access to Information Act is amended to remove the reference to the DSTA.

Clause 130

Bankruptcy and Insolvency Act
Subsection 149(3)

Consequential to the repeal of the DSTA, subsection 149(3) of the Bankruptcy and Insolvency Act is amended to remove the reference to the DSTA.

Clause 131

Criminal Code
Paragraph 462.48(2)(c)

Consequential to the repeal of the DSTA, paragraph 462.48(2)(c) of the Criminal Code is amended to remove the reference to the DSTA.

Clause 132

Excise Tax Act
Section 77

Consequential to the repeal of the DSTA, section 77 of the Excise Tax Act is amended to remove the reference to the DSTA.

Clause 133

Excise Tax Act
Subsection 229(2)

Consequential to the repeal of the DSTA, subsection 229(2) of the Excise Tax Act is amended to remove the reference to the DSTA.

Clause 134

Excise Tax Act
Subsection 230(2)

Consequential to the repeal of the DSTA, subsection 230(2) of the Excise Tax Act is amended to remove the reference to the DSTA.

Clause 135

Excise Tax Act
Subparagraph 238.1(2)(c)(iii)

Consequential to the repeal of the DSTA, subparagraph 238.1(2)(c)(iii) of the Excise Tax Act is amended to remove the reference to the DSTA.

Clause 136

Excise Tax Act
Section 263.02

Consequential to the repeal of the DSTA, section 263.02 of the Excise Tax Act is amended to remove the reference to the DSTA.

Clause 137

Excise Tax Act
Subsection 296(7)

Consequential to the repeal of the DSTA, subsection 296(7) of the Excise Tax Act is amended to remove the reference to the DSTA.

Clause 138

Export Development Act
Paragraph 24.3(2)(c)

Consequential to the repeal of the DSTA, paragraph 24.3(2)(c) of the Export Development Act is amended to remove the reference to the DSTA.

Clause 139

Financial Administration Act
Paragraph 155.2(6)(c)

Consequential to the repeal of the DSTA, paragraph 155.2(6)(c) of the Financial Administration Act is amended to remove the reference to the DSTA.

Clause 140

Tax Court of Canada Act
Section 12

Consequential to the repeal of the DSTA, section 12 of the Tax Court of Canada Act is amended to remove the references to the DSTA.

Clause 141

Tax Court of Canada Act
Paragraph 18.29(3)(a)

Consequential to the repeal of the DSTA, paragraph 18.29(3)(a) of the Tax Court of Canada Act is amended to remove the reference to the DSTA.

Clause 142

Tax Court of Canada Act
Subsection 18.31(2)

Consequential to the repeal of the DSTA, subsection 18.31(2) of the Tax Court of Canada Act is amended to remove the reference to the DSTA.

Clause 143

Tax Court of Canada Act
Subsection 18.32(2)

Consequential to the repeal of the DSTA, subsection 18.32(2) of the Tax Court of Canada Act is amended to remove the reference to the DSTA.

Clause 144

Income Tax Act
Paragraph 18(1)(t)

Consequential to the repeal of the DSTA, paragraph 18(1)(t) of the Income Tax Act is amended to remove the reference to the DSTA.

Clause 145

Income Tax Act
Subsection 164(2.01)

Consequential to the repeal of the DSTA, subsection 164(2.01) of the Income Tax Act is amended to remove the reference to the DSTA.

Clause 146

Income Tax Act
Subsection 221.2(2)

Consequential to the repeal of the DSTA, subsection 221.2(2) of the Income Tax Act is amended to remove the reference to the DSTA.

Clause 147

Canada Revenue Agency Act
Section 2

Consequential to the repeal of the DSTA, paragraph (a) of the definition "program legislation" in section 2 of the Canada Revenue Agency Act is amended to remove the reference to the DSTA.

Clause 148

Air Travellers Security Charge Act
Subsection 40(4)

Consequential to the repeal of the DSTA, subsection 40(4) of the Air Travellers Security Charge Act is amended to remove the reference to the DSTA.

Clause 149

Excise Act, 2001
Section 188

Consequential to the repeal of the DSTA, section 188 of the Excise Act, 2001 is amended to remove the references to the DSTA.

Clause 150

Excise Act, 2001
Subsection 189(4)

Consequential to the repeal of the DSTA, subsection 189(4) of the Excise Act, 2001 is amended to remove the reference to the DSTA.

Clause 151

Underused Housing Tax Act
Section 34

Consequential to the repeal of the DSTA, section 34 of the Underused Housing Tax Act is amended to remove the reference to the DSTA.

Clause 152

Select Luxury Items Tax Act
Section 45

Consequential to the repeal of the DSTA, section 45 of the Select Luxury Items Tax Act is amended to remove the reference to the DSTA.

Clause 153

Select Luxury Items Tax Act
Section 48

Consequential to the repeal of the DSTA, section 48 of the Select Luxury Items Tax Act is amended to remove the reference to the DSTA.

Clause 154

Select Luxury Items Tax Act
Subsection 53(3)

Consequential to the repeal of the DSTA, subsection 53(3) of the Select Luxury Items Tax Act is amended to remove the reference to the DSTA.

Clause 155

Select Luxury Items Tax Act
Subsection 57(6)

Consequential to the repeal of the DSTA, subsection 57(6) of the Select Luxury Items Tax Act is amended to remove the reference to the DSTA.

Clause 156

Select Luxury Items Tax Act
Section 94

Consequential to the repeal of the DSTA, section 94 of the Select Luxury Items Tax Act is amended to remove the reference to the DSTA.

Clause 157

Global Minimum Tax Act
Paragraph 67(2)(a)

Consequential to the repeal of the DSTA, the description of B in paragraph 67(2)(a) of the Global Minimum Tax Act is amended to remove the reference to the DSTA.

Clause 158

Global Minimum Tax Act
Section 77

Consequential to the repeal of the DSTA, section 77 of the Global Minimum Tax Act is amended to remove the reference to the DSTA.