Taxing online streaming services has been a hot topic federally and in many provinces. Last year, the Canadian government struck a deal with Netflix to exempt the company from taxes and content rules in exchange for a $500 million investment into Canadian programming. However, this move has not ended the conversation, and the Quebec government has been on the forefront of these discussions. Now, Quebec will be the first province to launch a sales tax for online services.
Quebec released their budget plan earlier this week which includes plans to collect Quebec Sales Tax (QST) on Canadian and foreign providers of digital services. Netflix, Amazon, iTunes, and Spotify are just a few of the companies that will be responsible for collecting and paying QST. The taxing applies to any digital service whose revenue exceeds $30,000 per year.
The province estimates that they lose $270 million in sales tax annually due to not collecting QST from online sales. They are hoping to bring in $154.5 million from the new digital service tax over the next five years.
Quebecers can expect a 9.975% QST tacked on to their online streaming bills as of January 1, 2019. So, start binge-watching all of the content you can.