Overview

Amazon has announced that it will no longer charge digital services fees related to Canada's Digital Services Tax Act (DSTA) starting August 15. The Canadian government recently signaled its intention to repeal the DSTA, prompting Amazon to eliminate the associated fee for sellers operating on the Amazon.ca marketplace. This change could meaningfully reduce operating costs for sellers established in Canada or those selling products through Amazon's Canadian store.

What's Changing

• Digital services fee removed — Effective August 15, Amazon will stop charging the digital services fee that was tied to Canada's Digital Services Tax for transactions on Amazon.ca.
• Refunds incoming — Any digital services fees already collected in connection with the Canadian DSTA will be refunded once the legislation is officially repealed.
• Rate card update — Amazon will update its fee rate card on August 15 to remove the Canadian digital service fee rates entirely.
• Other countries still affected — Digital services fees remain in effect for sellers operating across certain other international marketplaces, including the UK, France, Italy, Spain, and Turkey.

Background on the Digital Services Tax

Canada's Digital Services Tax Act was introduced as part of a broader global trend of governments imposing taxes on large technology companies and digital marketplaces. The tax was designed to capture revenue from digital services provided within Canada, and Amazon passed a portion of these costs along to sellers in the form of a digital services fee. The fee applied to sellers who were either established in Canada or who sold products through the Amazon.ca storefront, adding an incremental cost layer on top of existing referral fees, FBA fees, and other marketplace charges.

The Canadian government's decision to repeal the DSTA reflects shifting political and trade dynamics. Canada had faced significant pressure from the United States regarding the tax, as it was seen as disproportionately targeting American technology companies. The repeal aligns with broader negotiations around international digital taxation frameworks and trade agreements between the two countries. For Amazon sellers, the practical result is one fewer fee to account for when calculating margins on Canadian sales.