“In its current state, the proposed DSTA threatens the still-active recovery of the global travel tech marketplace with ambiguous and confusing language,” wrote Laura Chadwick, President and CEO of Travel Tech. “We are eager to work with the Government of Canada to ensure the companies who are required to comply can comply.”
Travel Tech’s comments detail how the proposed DSTA should be modified:
First, the Government of Canada should increase the DSTA threshold to align with OECD Pillar One, Amount A (i.e., EUR 20BN revenue and 10% Profit Before Tax margin). In an industry based on price comparisons, this will ensure companies can maintain their critical price competitiveness.
Second, the Government of Canada should allow a credit for DST, or any similar tax, paid in another jurisdiction to avoid double taxation. As written, the language regarding revenue sourcing rules is ambiguous and confusing, therefore, this addition will ensure clarity about taxation categories.
Finally, the Government of Canada should remove the two-year retroactivity of the DST and apply it only to revenues occurred on or after the date of enactment. A tax of this magnitude should not be backward-looking, especially after years of good-faith negotiation.
Canada is pursuing a 3 percent tax on the revenues of large technology companies as OECD-member nations continue to negotiate a global approach to digital services taxes.
The Travel Technology Association (Travel Tech) empowers traveler choice by advocating for public policy that promotes marketplace transparency and competition. Travel Tech represents the leading innovators in travel technology, including online travel agencies, metasearch engines, short-term rental platforms, global distribution systems, and travel management companies.
To schedule an interview with a Travel Tech spokesperson, contact Bradford Williamson of Glen Echo Group at 202.870.3234 or email@example.com.