Quebec will impose tax on Netflix in early 2018
Published Wednesday, November 8, 2017 1:18PM EST
Last Updated Wednesday, November 8, 2017 8:01PM EST
One month after MNAs voted in favour of taxing Netflix and all video streaming services, Quebec's finance minister is taking steps to enact the policy.
The vote came after Netflix reached a deal last month with the federal government to avoid being taxed in exchange for a promise to spend $500 million on Canadian productions over five years.
Quebec has since sent a letter to the federal finance minister, Bill Morneau, saying it will begin imposing provincial sales taxes on video streaming services.
Quebec Finance Minister Carlos Leitao said it was a necessary step in order to level the playing field.
"We need to inform them of our intentions because our sales tax, the TVQ, is also harmonized with the GST. Therefore any change, even an administrative change, because that's what it will be, an administrative change, the other government needs to be informed, so that's what we are doing," said Leitao.
In the letter Leitao said it would be desirably for both governments to impose taxes, but that Quebec is willing to go it alone if necessary.
“It is important to act on this, it is important to put in place a level playing field,” said Leitao. “It will be desirable for both governments to act in the same direction, but if ever the federal government decides that for whatever reason, they do not want to go in that direction, we are going in that direction, because we have our own revenue agency. We can do it (on our own).”
Multiple jurisdictions in the U.S. impose a tax on Netflix, including Kentucky, Pennsylvania, Florida, and Washington.
Critics say the Netflix deal with the federal government gives that company an unfair advantage compared to other streaming services.
The Parti Quebecois said it supports the Liberals’ decision, but is also proposing lowering taxes.
“We could, on the one hand, tax electronic business, as it has been proposed by many and by us in the past, and simultaneously to lower slightly the tax rate, the GST or the TVQ,” said PQ finance critic Nicolas Marceau.
The CAQ is also wondering about the overall effect on Quebecers’ wallets.
“They may announce a tax cut at the end of the month for 2017, so I want to wait and see, net, what will be the impact on the tax burden of Quebecers,” said CAQ leader Francois Legault.
The Quebec tax would likely be imposed in early 2018, and will also target other e-commerces like Amazon and e-Bay.