Canada - BEPS proposals for digital economy 

April 8: Canadian businesses that operate in the digital economy will want to follow the recent high-profile initiatives by the Organisation for Economic Co-operation and Development (OECD) in this area.

In its base erosion and profit shifting (BEPS) action plan, the OECD identified that the wide breadth of the digital economy presents particular challenges to existing international tax rules. The OECD released a discussion draft in March 2014 that identifies the tax challenges of the digital economy and summarizes potential alternatives to address such challenges (as originally stated in Action 1 of the plan). The OECD discusssion draft contains a detailed exploration of different options to consider for withholding tax, as well as viable options to collect VAT/GST on cross-border supplies.


In its 2014 federal budget, the Canadian government announced a parallel consultation process on BEPS and has set a consultation period for interested parties to provide input to the Department of Finance by 11 June 2014.


Read an April 2014 report prepared by the KPMG member firm in Canada: OECD Tackles Tax Challenges of the Digital Economy




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