Ottawa has investigated the possibility that Netflix will voluntarily collect taxes

New federal government documents reveal that Ottawa has been looking for ways to encourage online service companies like Netflix and Amazon to voluntarily collect sales taxes on their transactions. A strategy similar to the one Quebec plans to implement next year.

Memoranda submitted to Canadian Heritage Minister Mélanie Joly in the course of 2017 explain in detail how some governments elsewhere in the world have required online service companies to register with them so that they collect and remit taxes in force in the country, without having to create a new form of taxation.

The documents, obtained by The Canadian Press under the Access to Information Act, emphasize that states must simplify as much as possible the procedure that allows online service companies to register with the tax services office. for the purpose of collecting taxes that escape governments.

In Quebec, the Couillard government announced when it tabled its budget on Tuesday that it would do exactly that in order to apply the provincial sales tax to Netflix subscriptions and purchases made from Amazon. The province expects to recover approximately $ 154.5 million over the next five years.

The cost of Netflix subscriptions increased in two of the countries analyzed in reports to Minister Melanie Joly, both in Japan and Australia, after they imposed their sales taxes.

The New Democratic Party (NDP) called on the Liberal government on Wednesday to force Netflix to collect and remit taxes as the company does in the European Union.

NDP MP Guy Caron called on the government to modernize its laws and put everyone on an equal footing, arguing during Question Period in the House of Commons that it makes perfect sense to act so.

Prime Minister Justin Trudeau replied that it is the taxpayers who would pay the bill in reality. He remained firm on the subject and reiterated that his government would not impose taxes on taxpayers who subscribed to these online services.

Netflix has been at the forefront of dissatisfaction in Quebec since the unveiling of an agreement – described as naive by some – that the company must invest $ 500 million over five years in Canada as part of federal cultural policy.

Netflix has also committed to invest $ 25 million to produce content in French. A promise criticized in Quebec because no contractual obligation forces the company to actually produce this content.

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