Canadian 5% streaming media levy

1^st September 2024 5% tax on online streaming services

The Canadian TV and Telecoms Commission has announced a 5% streaming tax. This will be effective from 1 September 2024.

The levy is chaged at 5% on Canadian-generated revenus with online streaming TV, video, music and gaming services. The CRTC said the funding would be directed to areas of what it called immediate need in the broadcasting system, such as local news on radio and television, French-language content, and Indigenous content.  There is an annual sale threshold of CAS 25 million in revenues from Canada.

Canada Digital Services Tax at 3% was imposed retrospectively to 2022 last month.

Global streaming taxes

Streaming taxes on media, internet, and similar services are a growing trend as governments seek new revenue sources and aim to level the playing field between traditional and digital media. These are separate from VAT on digital services charges which is now adopted in over 100 countries.

Here is an overview of existing and proposed streaming taxes globally:

1. United States:

1. • Several states, including Pennsylvania, Washington, and Florida, have imposed sales taxes on streaming services like Netflix and Hulu.
   • Chicago introduced an “amusement tax” on streaming services in 2015, extending the city’s 9% tax to online entertainment.

2. Europe:

1. • The EU requires streaming services to ensure at least 30% of their content is locally produced, effectively acting as an indirect tax to support local content creators.
   • Denmark streaming tax was introduced in 2024.
   • Switzerland’s streaming tax at 4% was imposed following a 2022 referendum.
   • France has a music streaming levy of 1.2%
   • Countries like France and Spain impose direct levies on streaming services. France charges 2% on subscription revenues for video-on-demand services.
   • UK (France, Italy and others) have imposed “Digital Services Tax,” targeting tech giants with a 2% levy on revenues generated from UK users, impacting streaming platforms.

Proposed Streaming Taxes

1. United States:

1. • Proposals exist to expand digital taxes at both state and federal levels. For instance, New York has considered adding a 4% state sales tax on streaming services.

3. Australia:

1. • The Australian government has discussed implementing a digital tax similar to the EU’s to ensure global digital companies contribute fairly to the local economy.