Canada considers enforcing a ‘Netflix tax’

The Canadian government is considering to impose a so-called ‘Netflix tax’ on digital services bought from foreign companies over the Internet. Currently, Internet companies as Netflix do not apply Canadian sales taxes to the bills they send to Canadian customers, while Canadian firms do collect federal and provincial taxes. Canada has already endorsed OECD’s ‘destination principle’, which specifies that sales taxes apply to the jurisdiction in which the customer resides. Yet, this endorsement does not oblige companies to enforce such a sales-tax regime.