PARIS, DDTCNews – The Government of Canada is one of the member countries of the Inclusive Framework that disagrees declaration of results on Pillar 1: Unified Approach and Pillar 2: Global Anti Base Erosion (GloBE).
Canada disapproves of the Digital Tax Collection Termination Clause (digital services tax/DST) until December 31, 2024. Apart from Canada, the other countries that have not given their consent are Belarus, Pakistan, Russia and Sri Lanka.
“Canada does not accept this clause,” said the director of the OECD Center for Tax Policy and Administration, Manal Corwin, quoted Thursday (7/13/2023).
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Meanwhile, Canadian Finance Minister Chrystia Freeland explained that Canada always offers multilateral solutions to deal with international tax challenges. However, the country also has an interest in protecting Canada’s tax base from base erosion.
He said the delay in the implementation of the Multilateral Pillar 1 Convention (MLC) has forced the Canadian government to implement daylight saving time from January 1, 2024 in accordance with applicable national regulations.
“Yesterday, many countries agreed to extend the shutdown of DST collection until December 31, 2024, even though there was no clear deadline regarding the start date of the pillar 1 of the MLC. It hurts Canada,” he said.
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Need for clarity on the implementation of pillar 1 which is binding
Freeland said Canada supports the conclusion of an agreement on Pillar 1 of the MLC. However, Canada cannot provide full support if there is no clear and binding timeline for Pillar 1 implementation.
For information, member countries of the Inclusive Framework initially agreed not to implement the DST until December 31, 2023. This decision was made assuming that the MLC will be signed in mid-2023 and enter into force (Coming into force) from 2024.
Considering that the objective of the initial agreement has not been achieved, the 138 member countries of the Inclusive Framework have agreed to continue discussions on the technical aspects of the MLC and not to collect daylight saving time until as of December 31, 2024.
The OECD considers the willingness of countries not to implement DST or similar policies to be very important to avoid disruptions or delays in the MLC ratification process. (rigs)
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