Indirect Tax News - October 2021

Manitoba: The last Canadian jurisdiction to tax digital

On 7 April 2021, the Canadian province of Manitoba announced that it will begin taxing certain digital sales of goods and services effective 1 December 2021. Under the new rules, the following vendors will be required to register for, collect and remit the 7% Manitoba Retail Sales Tax (MB RST):

  • Audio and video streaming service providers on the sale of streaming services;
  • Online marketplaces on the sale of taxable goods sold by third parties via their online platforms; and
  • Online accommodation platforms on the booking of taxable accommodations in Manitoba.

The goal of the new provisions is to shore up lost tax revenue resulting from sales by nonresidents of Manitoba both within and outside Canada that previously were not required to register and collect tax.

Although the legislation has not been released and specific details are unknown, nonresident vendors identified in the announcement should begin preparations for MB RST registration and to modify their internal tax collection procedures.

Manitoba joins the federal government and three other provinces—British Columbia, Quebec and Saskatchewan—in a move to level the playing field between resident and nonresident vendors, ultimately eliminating tax benefits that many consumers enjoyed when purchasing from nonresidents that were not required to register for or collect MB RST on sales made in the province.

Brian Morcombe