PARIS, DDTCNews – The Canadian government is one of the member countries of the Inclusive Framework that does not agree statement of results on Pillar 1: Unified Approach and Pillar 2: Global Combat against Base Erosion (GloBE).
Canada rejects clause to stop digital tax collection (digital services tax/DST) until December 31, 2024. Besides Canada, the other countries that have not given their approval are Belarus, Pakistan, Russia and Sri Lanka.
“Canada does not accept this clause,” said Manal Corwin, director of the OECD Center for Tax Policy and Administration, quoted on Thursday (13/7/2023).
Meanwhile, Canadian Finance Minister Chrystia Freeland explained that Canada always prioritizes multilateral solutions to deal with international tax challenges. However, the country also has an interest in protecting Canada’s tax base from tax base erosion.
He said the delay in the implementation of Pillar 1 of the Multilateral 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 suspension of the perception of daylight saving time until December 31, 2024, although there is no clear deadline regarding when it will come into force of the first pillar of the MLC. This is detrimental to Canada,” he said.
Need for clarity on binding implementation of Pillar 1
Freeland said Canada supports reaching an agreement on Pillar 1 of the MLC. However, Canada cannot provide full support if there is no clear and binding implementation timeline for Pillar 1.
For information, the member countries of the Inclusive Framework initially agreed not to implement DST before 31 December 2023. This decision was taken on the assumption that the MLC would be signed in mid-2023 and enter into force (Coming into force) from 2024.
Considering that the objective of the initial agreement was not achieved, the 138 member countries of the Inclusive Framework agreed to continue discussions on the technical aspects of the MLC and not to levy DST until December 31, 2024.
The OECD believes that the willingness of countries not to implement DST or similar policies is very important to avoid any disruption or delay in the MLC ratification process. (platform)
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