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U.S. Requests USMCA Dispute Settlement Consultations on Canada's Digital Services Tax, Canada Responds

03 September 2024

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Approved Changes

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United States-Canada

The Office of the United States Trade Representative has issued a release announcing that the United States has requested dispute settlement consultations with Canada under the United States-Mexico-Canada Agreement (USMCA) regarding Canada's recently enacted digital service tax (DST). According to the release, Canada's DST appears to be inconsistent with Canada's commitments under the Cross-Border Trade in Services and Investment chapters of the USMCA not to treat U.S. businesses less favorably than Canadian businesses. Canada responded in a statement published by the Department of Finance, noting Canada's continued preference for a multilateral agreement to address the taxation of digital services under...