Companies like Netflix and Amazon have revolutionized the way that we watch TV, movies and buy just about anything. However with the internet and specifically Netflix and Amazon changing the way the |Canadians are spending their money, some updating on provincial taxation these new retail brands needed to happen (at least in the governments' mind).
Unfortunately, that has resulted in not only a new tax on Amazon but also Netflix as well.
The taxes were unveiled as a part of Quebec's latest budget, revealed to the public on Tuesday. Where officials "vowed' to put forth a Netflix tax as well as implement the tax on other online business behemoths that are taking over the market. Not only affecting Netflix but also any sales made over at Amazon, Spotify and even iTunes.
Online companies will have to register with Quebec by January 1st of 2019 where the province will begin collecting a 9.975% sales tax. Though not all online companies will have to register by January. Those that don't have a big presence in the province will be able to move forward without the tax until September of 2019.
Quebec's choice is a big contrast from the federal government's decision to not tax Netflix last year. Though the decision was fuelled by an agreement that Netflix would invest $500 million into Canadian programming. The only province who didn't like the deal was Quebec, mostly because Netflix didn't agree to create French exclusive content.
While it does sound like a bit of a petty move, there are real reasons that make sense as to why Quebec pulled the plug on Netflix's free ride in their province. Apparently, they lose around $270 million a year by not collecting tax on online sales in general, including Netflix. Plus, Netflix is currently steamrolling over Canadian competitor CraveTV that is subject to taxes.
Quebec is the first province to make a move like this but to assume no other provinces will follow would be naive. Although the deal with Netflix that the federal government made last year definitely does make the situation a lot more interesting. Until then, if you live in Quebec, you've got until next January to stream to your heart's desire tax-free!
Source: Huff Post Canada