Quebec splits with Canada feds in calling for Netflix tax

MONTREAL: The Quebec government wants to impose a tax on streaming service Netflix, the Canadian province’s finance minister said, after Ottawa opted not to do so.

Under the scheme proposed by Finance Minister Carlos Leitao, Netflix would have to pay at least 10 per cent on local subscriptions.

If the feds got onboard, the combined sales tax would rise to 15 per cent in Quebec – the same amount as for Canadian-based Internet companies.

Speaking to reporters, Leitao said Netflix has assured him that the company “would comply with Quebec’s (tax) laws.”

In a letter to his federal counterpart Bill Morneau, which was obtained by local media, Leitao said he would rather impose the higher harmonized federal- provincial sales tax on Netflix.

It could be rolled out as early as next year.

But, he added, “If we cannot come to an agreement, Quebec will have no choice but to act alone.”

“The status quo is no longer possible, our sales taxes must adapt to the realities of the 21st century, the fairness and legitimacy of our tax systems are at stake,” he said.

US-based Netflix currently pays no taxes in Canada, and had lobbied against being treated like a traditional broadcaster when the matter was being considered by Ottawa.

The federal government had been under pressure to impose a tax on Netflix, akin to fees paid by local broadcasters, that could be used to fund Canadian programming.

But a deal announced in September that would see Netflix spend C$500 million (US$400 million) over five years to make original films and television shows in Canada allowed it to avoid minimum Canadian content regulations and paying into a government arts fund. — AFP