Is Canada's Digital Services Tax still in force, and what happens to DST my client already paid?
No. Canada's Digital Services Tax was repealed when Bill C-15 received Royal Assent on March 26, 2026, and the repeal is deemed in force from June 20, 2024, so no DST is owed for any year. The CRA is refunding every DST payment with interest and closing DST accounts automatically.
Is the digital services tax still in force as of October 2026?
No. As of October 2026 the Digital Services Tax Act is repealed: Bill C-15, the Budget Implementation Act, 2025, No. 1, received Royal Assent on March 26, 2026 canada.ca, and section 126 of that Act repeals the DST Act with a deemed coming into force date of June 20, 2024
laws-lois.justice.gc.ca. Section 127 repeals the Digital Services Tax Regulations the same way. Justice Laws now shows the Act as "Repealed, 2026, c. 3, s. 126"
laws-lois.justice.gc.ca.
| Date | What happened |
|---|---|
| June 20, 2024 | DST Act enacted in the Fall Economic Statement Implementation Act, 2023 (S.C. 2024, c. 15, s. 96) |
| June 29, 2025 | Finance announces the DST will be rescinded and the June 30, 2025 collection halted |
| By September 2025 | Minister writes to DST taxpayers: retroactive repeal, refunds with interest |
| March 26, 2026 | Bill C-15 receives Royal Assent; S.C. 2026, c. 3, ss. 126 to 128 repeal the Act and regulations |
| Deemed June 20, 2024 | Effective date of the repeal, the day the Act was first enacted |
The June 2025 announcement only paused collection: the Finance release said the June 30, 2025 collection would be halted and that legislation to rescind the Act would follow canada.ca. Until March 26, 2026 the Act stayed on the books. The CRA's own page now reads that the tax and all related obligations under the Act no longer apply
canada.ca.
What did the Act require before it was repealed?
If your client prepared 2024 DST filings, these were the rules. All of them are void now, because the repeal reaches back to the day the Act was enacted. The rate and the first year formula are in section 10 laws-lois.justice.gc.ca, the thresholds in the regulations
laws-lois.justice.gc.ca, and the deadlines in sections 41, 45 and 49 of the Act
laws-lois.justice.gc.ca.
| Rule | Figure | Source |
|---|---|---|
| Rate | 3% of taxable Canadian digital services revenue | Act s. 10(1) |
| Global revenue threshold | €750,000,000 of total revenue (taxpayer or group) | Regs s. 3 |
| In scope revenue threshold | Canadian digital services revenue over $20,000,000 | Regs s. 4 |
| Deduction amount | $20,000,000, shared across a consolidated group | Regs s. 7, Act s. 24 |
| Registration threshold | $10,000,000 of Canadian digital services revenue | Regs s. 5 |
| Registration deadline | January 31 after the first qualifying year | Act s. 41 |
| Return and payment due | June 30 of the following calendar year | Act ss. 45, 49 |
| First year catch up | 3% of taxable revenue for qualifying years after 2021 | Act s. 10(2), Regs s. 6 |
The revenue in scope came from four streams: online marketplace services, online advertising services, social media services and user data. The catch up is why the 2024 return was so large: the first year bill swept in 2022 and 2023 revenue too, and both were due on June 30, 2025.
Worked example: what a 2024 return would have shown
Take a standalone corporation (no consolidated group) that clears the €750,000,000 global revenue test, with Canadian digital services revenue of $35,000,000 in 2022, $45,000,000 in 2023 and $60,000,000 in 2024. Each year is over the $20,000,000 in scope threshold, so each year counts.
| Year | Canadian digital services revenue | Less deduction | Taxable revenue | 3% |
|---|---|---|---|---|
| 2022 (catch up) | $35,000,000 | $20,000,000 | $15,000,000 | $450,000 |
| 2023 (catch up) | $45,000,000 | $20,000,000 | $25,000,000 | $750,000 |
| 2024 (first year) | $60,000,000 | $20,000,000 | $40,000,000 | $1,200,000 |
| Total due June 30, 2025 | $80,000,000 | $2,400,000 |
After the repeal, the liability for all three years is $0. If the corporation paid the $2,400,000, the CRA owes it back, plus interest from the day the payment was received until the day the refund is paid.
The threshold and the deduction work differently, which is the gotcha when you check an old calculation. The $20,000,000 threshold is a pass or fail test on gross Canadian digital services revenue; the $20,000,000 deduction then comes off before the 3% applies. A client at $21,000,000 was in scope but would have owed only 3% of $1,000,000, or $30,000.
How do DST refunds work?
Section 128 of the 2026 Act says the Minister must refund any amount paid before Royal Assent that would have been DST, a penalty, interest or another amount under the Act, together with interest. Interest runs from the day the Receiver General received the payment to the day the refund is paid, at the rate in paragraph 2(1)(a) of the Interest Rates (Excise Act, 2001) Regulations laws-lois.justice.gc.ca. The Minister's letter to DST taxpayers had promised exactly that: repeal effective June 20, 2024 and refunds with interest from the day each payment was received
canada.ca.
The CRA describes the interest as the rate generally applicable to corporate tax refunds. It pays by direct deposit to taxpayers enrolled for it and by cheque otherwise, and if a refund exceeds $25 million the CRA contacts the taxpayer to arrange payment canada.ca. The corporate overpayment rate for October 1 to December 31, 2026 is 3%
canada.ca. For the quarter by quarter history, see CRA prescribed interest rates 2026.
DST program accounts close on their own. The CRA says there is no action required from the business, and that questions about past payments, refunds or program accounts go to the CRA directly canada.ca.
The refund goes to the person who paid the Crown. If a platform charged your client a DST surcharge and remitted the tax itself, section 128 refunds the platform, not your client. Getting a surcharge back is a matter between your client and its supplier.
What still applies to digital businesses selling into Canada?
GST/HST does. The repeal touched only the DST. Since July 1, 2021, the Excise Tax Act has required nonresident vendors and nonresident digital platform operators selling taxable digital products or services to Canadian consumers, and to Canadian businesses not registered under the normal regime, to register under the simplified GST/HST regime. Distribution platform operators and accommodation platform operators are covered too canada.ca.
So a foreign client that was in scope for the DST may still have GST/HST obligations on the same Canadian sales. Part 2 of the 2026 Act also made consequential amendments to the Excise Tax Act, the Income Tax Act and other statutes to remove references to the DST laws-lois.justice.gc.ca.
Sources
Does my client have to apply for the DST refund?
The CRA hasn't published a claim process. Its page says the CRA will refund all DST payments it received, by direct deposit if your client is enrolled and by cheque otherwise, and will contact taxpayers whose refund exceeds $25 million canada.ca.
Is the 2022 and 2023 catch up still owed?
No. The catch up was part of the first year formula in subsection 10(2), and the whole Act is repealed with a deemed coming into force date of June 20, 2024, so no DST exists for 2022, 2023 or any later year laws-lois.justice.gc.ca.
Did the June 2025 announcement end the tax?
Do penalties and interest my client paid under the DST come back too?
Yes. Section 128 covers any amount paid that would have been tax, a penalty, interest or another amount under the DST Act, and refunds it with interest laws-lois.justice.gc.ca.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.