Netflix is informing Canadian customers that it will start adding GST/HST to their bills starting July 1st due to an upcoming federal tax measure.
“Due to a recent change in Canada’s tax law, the federal GST/HST will start to apply to your Netflix membership cost. The applicable GST/HST rate varies by province. You will see this on your next bill on or after July 1, 2021,” the email sent to customers reads.
In November 2020, the federal government unveiled a plan to impose a tax on digital giants like Netflix and Spotify, which will essentially force them to collect HST and GST on services sold to Canadians.
For context, under current rules, foreign-based digital businesses can sell their goods and services to Canadians without charging GST and HST. However, this will change shortly as the new tax changes are scheduled to go into effect on July 1st.
The government says this tax measure will increase federal revenues by $1.2 billion over five years. Finance Minister Chrystia Freeland has stated that it’s meant to ensure that digital corporations pay their fair share like any other company operating in Canada.
Netflix recently increased its monthly standard plan in Canada by one dollar to $14.99, and its premium plan by two dollars to $18.99.