In this April 18, 2017, file photo, conference workers speak in front of a demo booth at Facebook’s annual F8 developer conference, in San Jose, Calif. Facebook and Instagram say it will charge goods and services taxes on online advertisements purchased through its Canadian operations. THE CANADIAN PRESS/AP/Noah Berger, File

Facebook, Instagram to charge GST on online ads by mid-2019

Facebook and Instagram will charge tax on online advertisements for their Canadian operations

Facebook and Instagram will charge the goods and services tax on online advertisements purchased through their Canadian operations, but other technology giants said they aren’t ready to follow suit just yet.

The U.S.-based social media networks said they decided to apply the taxes by mid-2019 in an effort to “provide more transparency to governments and policy makers around the world who have called for greater visibility over the revenue associated with locally supported sales in their countries.”

RELATED: Canadian government spending tens of millions on Facebook ads

The federal government has long faced pressure to force foreign online services to apply sales taxes to their work, but has shied away from such measures, despite its international trade committee urging Prime Minister Justin Trudeau to make online services pay the taxes so small- and medium-sized businesses don’t lose customers to larger firms based abroad.

The decision to charge the taxes could create a windfall for the federal government and bring it closer to the 2020 deadline it set with other G20 countries to develop an international tax plan to address companies that are based in one country but have the potential to pay taxes in another.

In the wake of Facebook and Instagram’s announcement, a spokesperson for Twitter Canada said it does not currently charge sales taxes on ads and a representative for Uber Canada said it already applies sales taxes on all of its rides and food delivery orders in the country.

Google referred The Canadian Press to statements the company made back in May indicating that it would comply with legislation, should the federal government create regulations to require the collection of such taxes on digital sales.

The company noted that it already plans to comply with similar legislation Quebec passed around its sales tax.

Meanwhile, streaming service Netflix said only that it “pays all taxes when required by law.”

Short-term rental company Airbnb previously asked the federal government for regulation around taxes.

RELATED: Facebook finds ‘sophisticated’ efforts to disrupt U.S. elections

“We think as a platform our hosts should pay taxes. I know people get shocked when we say that, but we do. We think we should be contributing,” Alex Dagg, Airbnb’s public policy manager in Canada, said in an interview.

“We just need to figure out what are the appropriate rules in place to do that and how can we facilitate that.”

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

A Red Deer woman dies in a crash east of Stettler

Police continue to investigate collision

Couple arrested in Halkirk area drug bust appear in Stettler court

Charges stem from July RCMP raid on Paintearth County home

UPDATE: 18-year-old Rimbey teen dies in collision

A portion of Highway 53 west of Rimbey is down to one lane while crews investigate

U.S. congressman issues dire warning to Canada’s NAFTA team: time is running out

Canadian Foreign Affairs Minister Chrystia Freeland is expected to resume talks with the U.S.

Tornado touches down in Ottawa and Gatineau, Que.

Environment Canada says cars and homes have been damaged by severe thunderstorms and high wind gusts

Tilray Inc sees $10-billion in market cap go up in smoke

Tilray’s share price closed at $123 US on Friday, a decline from its intraday peak of nearly $300 US earlier in the week

Canada to boost support for riskier forms of renewable energy: minister

A $30-million contribution to a $117-million tidal project hopes to harness the immense power of the Bay of Fundy

WATCH: Grey Cup was in Red Deer to support military families

Money raised will go towards the Military Family Resource Centre

Browns beat streak, win first NFL game in 635 days

Baker Mayfield erased any doubts about why the Browns selected him with the No. 1 overall pick

New silver collector coin features Indigenous dancer

New silver collectors coin captures fast-paced energy of an Indigenous powwow

Off Nova Scotia, a bid to ‘unravel the mystery’ of great white sharks

The question: Is Nova Scotia the second mating site for Atlantic white sharks, something scientists say could be key to protecting the endangered species.

Most Read