Netflix recently announced that it will be investing around half a billion dollars into Canadian media production. You would think Canada and its provinces would be happy? Turns out not so much for Province of Quebec, mainly French speaking province.
Quebec provincial government has decided that they now need to tax video services across the province even though the service is not taxable federally or in other provinces. Starting 2019 Quebec will require all video services to add QST , provincial service tax, to providers of video like Netflix, Amazon Video, etc.
Quebec said it does not matter if a company is based physically in Quebec or Canada, but as soon as it hits $30k in revenues, it will require that service to start adding QST to their pricing schemes or face penalties.
It will be interesting to see how they will try to enforce it when Quebec has no jurisdiction outside its province and Netflix does not have an office or physical presence in Quebec. What happens if Netflix won't comply? Will they ask Videotron and other Internet Providers to ban the video streaming websites outright like China does?
Twitter users were not so happy this this announcement:
Quebec has become the first province to implement a 'Netflix tax'.
The new announcement has made the super long “Except in Quebec” list. pic.twitter.com/Z26UX0c11u
— Clinton Herman (@ClintonOnAir) March 29, 2018
— Dennis Koch 🖖 (@DennisKoch10) March 28, 2018
Why is Quebec so overzealous on collecting taxes no other state or province in North America collects? Simple, even though Quebec is the highest taxed province in North America - it wants to collect even more tax dollar from foreign billion dollar internet companies.
Quebec believes it's losing out on $226.8 million annually in tax revenues from e-commerce and by taxing media services Quebec says it will add $150m to their tax coffers.