How a complicated big-tech tax could cause a major headache for Canada-U.S. relations

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How a complicated big-tech tax could cause a major headache for Canada-U.S. relations
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The logos for Facebook Inc., Amazon.com Inc., Netflix Inc. and Google, a unit of Alphabet Inc., sit on smartphone and tablet devices in this arranged photograph in London, U.K., on Monday, Aug. 20, 2018.

Canada is pushing ahead on its plan to introduce a digital services tax on some of the world's biggest tech companies — putting it out of sync with some of its closest allies, including the United States.Experts say Canada is putting itself at risk by planning to strike out on its own and implement a digital services tax on some of the world's big tech giants.

The delay is due in part to the existence of a large-scale international process — led by the the Organization for Economic Co-operation and Development and the G20 — that would implement a taxation system on major multinationals and would potentially replace digital services taxes that are currently in place around the world.

Deputy Prime Minister and Finance Minister Finance Chrystia Freeland, shown in Ottawa last month, says delaying implementation of an international agreement by another year puts Canada at a disadvantage relative to countries that already have digital services taxes. Dawson, a Canadian based in Georgia, says Canada should think twice about its course of action on the potential tax, or risk widening a possible trade war with the U.S.

Ottawa also risks escalating a conflict with big tech companies, who experts say could try to single Canada out.

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