Quebecers will soon have to start paying more for their streaming subscriptions as the “Netflix tax” comes into effect.
The announcement was made on Tuesday in Quebec’s budget plan. The new tax will require foreign online services to register with the government and pay a 9.975% provincial sales tax as of January 1, 2019. The tax is only applicable to companies that collect over $30,000 in revenue from Quebecers per year.
The tax will apply to Netflix, Amazon, Spotify, iTunes, and various other online services that operate outside Quebec.
The province believes it is losing $226.8 million in annual tax revenues from e-commerce companies that run outside Quebec.
Companies that do not have a large online presence outside of Quebec will not be taxed until September 1, 2019.
Customers caught trying to dodge the tax by falsifying their place of residence will face a penalty of $100 or 50% of the payable QST tax, depending on which is higher.