Digital Services Tax Act (S.C. 2024, c. 15, s. 96)

Marginal note:Canadian online advertising services revenue

16 A taxpayer’s Canadian online advertising services revenue for a calendar year is the amount determined by the formula

DIVISION CCanadian Social Media Services Revenue

Marginal note:Definition of social media services revenue

• 17 (1) In this Part and Part 5 and subject to subsection (2) and Division E, social media services revenue, of a taxpayer, means revenue earned by the taxpayer in respect of a social media platform of the taxpayer (or of another constituent entity of a consolidated group of which the taxpayer is, at the time the revenue is earned, a constituent entity) from

  • (a) the provision of access to, or the use of, the social media platform;

  • (b) the provision of premium services and other optional enhancements to the basic function, or changes to the standard commercial terms, of the services provided in respect of the social media platform;

  • (c) the facilitation of an interaction between users, or between a user and digital content generated by other users, on the social media platform; and

  • (d) sources prescribed by regulation.

• Marginal note:Interpretation — revenue exclusion

  (2) For the purpose of the definition social media services revenue in subsection (1), revenue earned by a taxpayer in respect of a social media platform does not include revenue

  • (a) described in any of paragraphs 13(1)(a) to (d) and 15(1)(a) to (c);

  • (b) from the provision of private communication services comprised of any combination of video calling, voice calling, email or instant messaging, if the sole purpose of the platform is to provide those services;

  • (c) earned from a constituent entity of a consolidated group if, at the time the revenue is earned, the taxpayer is a constituent entity of the group; or

  • (d) from sources prescribed by regulation.

Marginal note:Canadian social media services revenue

18 A taxpayer’s Canadian social media services revenue for a calendar year is the total of all amounts each of which is an amount, in respect of a social media platform, determined by the formula

DIVISION DCanadian User Data Revenue

Marginal note:Definition of user data revenue

• 19 (1) In this Part and Part 5 and subject to subsection (2) and Division E, user data revenue, of a taxpayer, means revenue earned by the taxpayer in respect of user data collected from a user by the taxpayer (or collected from a user by another constituent entity of a consolidated group of which the taxpayer is, at the time the taxpayer obtains access to the data, a constituent entity) from

  • (a) if the user data is collected from an online marketplace, a social media platform or an online search engine,

    • (i) the sale of the user data, or

    • (ii) the granting of access to the user data; and

  • (b) sources prescribed by regulation.

• Marginal note:Interpretation — revenue exclusion

  (2) For the purpose of the definition user data revenue in subsection (1), revenue earned by a taxpayer in respect of user data does not include revenue

  • (a) described in any of paragraphs 13(1)(a) to (d), 15(1)(a) to (c) and 17(1)(a) to (d);

  • (b) earned from a constituent entity of a consolidated group if, at the time the revenue is earned, the taxpayer is a constituent entity of the group; or

  • (c) from sources prescribed by regulation.

Marginal note:Canadian user data revenue

20 A taxpayer’s Canadian user data revenue for a calendar year is the amount determined by the formula

DIVISION ERules Relating to Determination of Canadian Digital Services Revenue

Marginal note:Revenue of new constituent entities

• 21 (1) If a taxpayer meets the condition set out in subparagraph 10(1)(a)(iii) for a particular calendar year, and does not meet at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) for the particular calendar year, then online marketplace services revenue, online advertising services revenue, social media services revenue and user data revenue of the taxpayer for the particular calendar year do not include revenue earned by the taxpayer before the first moment in the particular calendar year when the taxpayer becomes a constituent entity of a consolidated group described in subparagraph 10(1)(a)(iii).

• Marginal note:Definition of in-scope period

  (2) If subsection (1) applies to a taxpayer for a particular calendar year, in this Part and in the definition relevant time in Part 4, the in-scope period, of the taxpayer, means the period during the particular calendar year beginning at the first moment in the particular calendar year when the taxpayer becomes a constituent entity of a consolidated group described in subparagraph 10(1)(a)(iii) and ending on December 31.

Marginal note:Attribution of activity

22 Revenue of a particular constituent entity of a consolidated group is deemed to be Canadian digital services revenue of the particular entity if the revenue

• (a) is in respect of the provision of a service, or the selling or granting of access to user data, by another constituent entity of the group; and

• (b) would be Canadian digital services revenue of that other entity if the revenue were earned by the other entity.

PART 4Taxable Canadian Digital Services Revenue

Marginal note:Definitions

23 The following definitions apply in this Part.

deduction amount

deduction amount means an amount prescribed by regulation. (montant de la déduction)

relevant interval

relevant interval, of a taxpayer in a calendar year, means any period from one relevant time of the taxpayer in the year to the next relevant time of the taxpayer in the year. (intervalle pertinent)

relevant time

relevant time, of a particular taxpayer in a calendar year, means

• (a) the first moment of

  • (i) the in-scope period of the particular taxpayer if section 21 applies to the particular taxpayer for the calendar year, or

  • (ii) January 1 in any other case;

• (b) the last moment of December 31;

• (c) any time between the time referred to in paragraph (a) and the time referred to in paragraph (b) at which the particular taxpayer becomes, or ceases to be, a constituent entity of a consolidated group; and

• (d) any time between the time referred to in paragraph (a) and the time referred to in paragraph (b) at which

  • (i) the particular taxpayer is a constituent entity of a consolidated group, and

  • (ii) any other taxpayer becomes, or ceases to be, a constituent entity of the group. (moment pertinent)

Marginal note:Determination

24 A particular taxpayer’s taxable Canadian digital services revenue for a calendar year is the amount determined by the formula

PART 5Miscellaneous

DIVISION ATrustees and Receivers

Marginal note:Definitions

25 The following definitions apply in this Division.

bankruptcy day

bankruptcy day, of a taxpayer, means a day on which a trustee becomes the trustee in bankruptcy of the taxpayer. (jour de la faillite)

bankruptcy period

bankruptcy period, of a taxpayer in respect of a bankruptcy day of the taxpayer, means the period during a calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) beginning on the day after the bankruptcy day and ending on the earlier of the day on which the discharge of the trustee is granted under the Bankruptcy and Insolvency Act and December 31. (période de faillite)

bankrupt year

bankrupt year, of a taxpayer in respect of a bankruptcy day of the taxpayer, means any calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) between the calendar year in which the bankruptcy day occurs and the calendar year in which the discharge of the trustee is granted under the Bankruptcy and Insolvency Act. (année de faillite)

business

business includes a part of a business. (entreprise)

pre-bankruptcy period

pre-bankruptcy period, of a taxpayer in respect of a bankruptcy day of the taxpayer, means the period during a calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) beginning on January 1 and ending on the bankruptcy day. (période de pré-faillite)

pre-cease period

pre-cease period, of a taxpayer in respect of a receivership day of the taxpayer, means the period during a particular calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) after the year in which the receivership day occurs beginning on January 1 of the particular calendar year and ending on the day on which the receiver ceases to act as receiver of the taxpayer. (période antérieure à la cessation)

pre-discharge period

pre-discharge period, of a taxpayer in respect of a bankruptcy day of the taxpayer, means the period during a particular calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) after the year in which the bankruptcy day occurs beginning on January 1 of the particular calendar year and ending on the day on which the discharge of the trustee is granted under the Bankruptcy and Insolvency Act. (période antérieure à la libération)

pre-receivership period

pre-receivership period, of a taxpayer in respect of a receivership day of the taxpayer, means the period during a calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) beginning on January 1 and ending on the receivership day. (période antérieure à la mise sous séquestre)

receiver

receiver means a person that

• (a) under the authority of a debenture, bond or other debt security, of a court order or of an Act of Parliament or of the legislature of a province, is empowered to operate or manage a business or a property of another person;

• (b) is appointed by a trustee under a trust deed in respect of a debt security to exercise the authority of the trustee to manage or operate a business or a property of the debtor under the debt security;

• (c) is appointed by a bank or an authorized foreign bank, as those terms are defined in section 2 of the Bank Act, to act as an agent or mandatary of the bank in the exercise of the authority of the bank under subsection 426(3) of that Act in respect of property of another person; or

• (d) is appointed as a liquidator to liquidate the assets of a corporation or to wind up the affairs of a corporation.

It includes a person that is appointed to exercise the authority of a creditor under a debenture, bond or other debt security to operate or manage a business or a property of another person, but, if a person is appointed to exercise the authority of a creditor under a debenture, bond or other debt security to operate or manage a business or a property of another person, it does not include that creditor. (séquestre)

receivership day

receivership day, of a taxpayer, means the earliest day on which a receiver

• (a) is vested with authority to manage, operate, liquidate or wind up any business or property or to manage and care for the affairs and assets of the taxpayer; and

• (b) is in possession of or controls and manages the affairs and assets of the taxpayer. (jour de mise sous séquestre)

receivership period

receivership period, of a taxpayer in respect of a receivership day of the taxpayer, means the period during a calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) beginning on the day after the receivership day and ending on the earlier of the day on which the receiver ceases to act as receiver of the taxpayer and December 31. (période de mise sous séquestre)

relevant assets

relevant assets of a receiver means the part of the properties, businesses, affairs or assets of a person to which the receiver’s authority relates. (actif pertinent)

year in receivership

year in receivership, of a taxpayer in respect of a receivership day of the taxpayer, means any calendar year (for which the taxpayer satisfies at least one of the conditions set out in subparagraphs 10(1)(a)(i) and (ii) and satisfies the condition set out in paragraph 10(1)(b)) between the calendar year in which the receivership day occurs and the calendar year in which the receiver ceases to act as receiver of the taxpayer. (année sous séquestre)