Canada repeals digital tax: restarts trade negotiations with Trump!

Canada repeals digital tax: restarts trade negotiations with Trump!

On June 30, 2025, Canada decided to withdraw the controversial digital tax for US companies. This announcement was made by Canadian Finance Minister François-Philippe Champagne and comes in the context of efforts to reach a trade agreement with the United States. A key aim of the talks is to secure the best conditions for Canadian workers and businesses. The withdrawal of the tax is part of a broader strategy to restart trade negotiations with the US.

US President Donald Trump and Canadian Prime Minister Mark Carney have agreed to continue negotiations on July 21, 2025. Hopes lie in a comprehensive trade agreement that strengthens economic cooperation between the two countries. The stop on the collection of the Digital Services Tax (DST) is effective immediately and was introduced back in 2020 to ensure that large technology companies pay taxes on their revenue in Canada.

New trade negotiations in focus

The withdrawal of the digital tax comes against the backdrop of intensive economic and security policy discussions between Canada and the USA. Prime Minister Carney has stressed that negotiations will continue for as long as necessary, but no longer. This suggests an urgency that the Canadian government feels in creating a stable trading environment.

Canada's Department of Finance also announced that legislation to repeal the Digital Services Tax Act will soon be introduced. These legislative steps aim to ensure smooth progress in trade negotiations while Canada favors a multilateral solution to digital taxation.

In summary, Canada's withdrawal of the digital tax sends a clear signal towards closer economic cooperation with the USA. Both nations are committed to concluding negotiations on July 21, 2025 with the aim of creating a beneficial trade agreement.

For more information see The standard and Government of Canada.