Apple's Canadian customers will begin to see GST / HST charges when making a purchase or rental on iTunes.
Marketing and Public Relations Consultant Trevor Taylor tweeted on January 1, 2019: "Has anyone else been tagged in your @AppleMusic subscription for the first time in Canada? Suddenly, am I being charged for the HST at $ 9.99? "
– Trevor Taylor ™ (@trevtaylor) January 1, 2019
iPhone in Canada reported on January 7 that it also saw a new HST / GST rate when making a lease.
In a screenshot, she compared two different movie locations made on different dates, reflecting the changes. The first picture showed a pre-New Year's rent that charged the customer $ 4.99 CAD without the extra $ 5.59 (the client was based in British Columbia, where sales tax is 12%).
Apple Canada has confirmed MobileSyrup changes will affect certain products.
"As the largest contributor in the world, we respect the important role that taxes play in society. Due to recent changes in Canadian law and the growth of our business, sales tax will now be charged on TV, movie, music and audiobook purchases, "said an Apple spokesman.
The company said changes were made after the new Canadian digital sales tax legislation came into effect on January 1, 2019. That legislation is specific to Quebec.
This legislation was unveiled in March 2018 when the Quebec government unveiled the digital sales tax plan that would require non-resident digital service providers to register, collect and remit a Quebec Sales Tax.
Non-resident digital businesses had to be registered before the start of the new year, the rule says.
This rule applies only to the province of Quebec. As far as the rest of Canada is concerned, there is no definitive rule for taxing non-resident digital businesses.
In January 2017, the CBC reported that, according to an internal government document, the federal government was in negotiations for taxation of services provided by foreign, such as iTunes, Netflix and Spotify.
This document suggested that not having these taxes "not only represents a significant loss of potential tax revenue to the government but can also put domestic digital providers at an unfair competitive disadvantage."
Federal lawmakers debated whether foreign digital companies should be subject to a tax, but no legislation came into effect.
The decision to tax customers may mean that the company is preemptively making a change that could affect all foreign digital businesses, while concurring with that decision with the latest changes in Quebec legislation.
It is also important to note that Apple has been in Canada for 38 years. The company already charges HST / GST for most of its other products and services.