In this April 18, 2017, file photo, conference workers speak in front of a demo booth at Facebook’s annual F8 developer conference, in San Jose, Calif. Facebook and Instagram say it will charge goods and services taxes on online advertisements purchased through its Canadian operations. THE CANADIAN PRESS/AP/Noah Berger, File

Facebook, Instagram to charge GST on online ads by mid-2019

Facebook and Instagram will charge tax on online advertisements for their Canadian operations

Facebook and Instagram will charge the goods and services tax on online advertisements purchased through their Canadian operations, but other technology giants said they aren’t ready to follow suit just yet.

The U.S.-based social media networks said they decided to apply the taxes by mid-2019 in an effort to “provide more transparency to governments and policy makers around the world who have called for greater visibility over the revenue associated with locally supported sales in their countries.”

RELATED: Canadian government spending tens of millions on Facebook ads

The federal government has long faced pressure to force foreign online services to apply sales taxes to their work, but has shied away from such measures, despite its international trade committee urging Prime Minister Justin Trudeau to make online services pay the taxes so small- and medium-sized businesses don’t lose customers to larger firms based abroad.

The decision to charge the taxes could create a windfall for the federal government and bring it closer to the 2020 deadline it set with other G20 countries to develop an international tax plan to address companies that are based in one country but have the potential to pay taxes in another.

In the wake of Facebook and Instagram’s announcement, a spokesperson for Twitter Canada said it does not currently charge sales taxes on ads and a representative for Uber Canada said it already applies sales taxes on all of its rides and food delivery orders in the country.

Google referred The Canadian Press to statements the company made back in May indicating that it would comply with legislation, should the federal government create regulations to require the collection of such taxes on digital sales.

The company noted that it already plans to comply with similar legislation Quebec passed around its sales tax.

Meanwhile, streaming service Netflix said only that it “pays all taxes when required by law.”

Short-term rental company Airbnb previously asked the federal government for regulation around taxes.

RELATED: Facebook finds ‘sophisticated’ efforts to disrupt U.S. elections

“We think as a platform our hosts should pay taxes. I know people get shocked when we say that, but we do. We think we should be contributing,” Alex Dagg, Airbnb’s public policy manager in Canada, said in an interview.

“We just need to figure out what are the appropriate rules in place to do that and how can we facilitate that.”

The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Kenney discusses COVID-19 affects on agriculture, infrastructure over teleconference

Alberta government announced additional infrastructure funding to spur job growth

UPDATED: Photos of the teachers, youth centre staff parade

Honks, signs, waves lift students April 8

UPDATE: Canadians awake to extra COVID-19 emergency benefit money, feds clarify changes

The CRA and federal officials are working to clarify the confusion around payments

A message from the publisher

Consider a voluntary subscription to Ponoka News

Leafs’ Matthews hoping to take care of ‘unfinished business’ if season resumes

Leafs’ Matthews hoping to take care of ‘unfinished business’ if season resumes

No ice, big problem: Nothing mimics skating for NHL players

No ice, big problem: Nothing mimics skating for NHL players

Oilers forward Cave remains in medically-induced coma at Toronto hospital

Oilers forward Cave remains in medically-induced coma at Toronto hospital

In abrupt about-face, UFC halts shows in face of COVID-19 pandemic

In abrupt about-face, UFC halts shows in face of COVID-19 pandemic

Saskatchewan premier doesn’t see need for Emergencies Act in COVID-19 fight

Saskatchewan premier doesn’t see need for Emergencies Act in COVID-19 fight

Two dead, including 16-year-old girl, in two Winnipeg police shootings

Two dead, including 16-year-old girl, in two Winnipeg police shootings

Champagne defends amended Saudi-Canadian arms deal, says rights concerns remain

Champagne defends amended Saudi-Canadian arms deal, says rights concerns remain

Most Read