From: canada.revenueagency@canada.com   
      
   How Netflix subscribers may be unwitting tax evaders : CRA SOTW    
      
   Netflix does not charge its subscribers GST, but that apparently does not give   
   subscribers a free pass.    
      
   By:Joel Eastwood Data Journalist, Published on Mon Aug 10 2015    
      
   If your Netflix monthly payment looks like it's tax-free, it's not. Canadian   
   Netflix subscribers are technically required to voluntarily hand over the   
   sales tax even if they don't see it on their statements, according to Finance   
   Canada.    
      
   If a foreign business does not charge sales tax, the responsibility to pay   
   falls on the Canadian customer buying taxable goods and services over the   
   Internet.    
      
   "In such cases, Canadian consumers are required to self-assess the amount of   
   tax they owe to the Canada Revenue Agency," a Finance Canada spokesperson, who   
   did not want to be attributed, said in an email.    
   Prime Minister Stephen Harper raised the issue of a Netflix tax in the federal   
   election campaign when he declared on Aug. 5 he was "100 per cent against a   
   Netflix tax," accusing the opposition NDP and Liberals of supporting a tax on   
   the popular digital    
   streaming service.    
      
   Both party leaders have denied Harper's charge.    
      
   Unlike a business housed within Canada's borders, the U.S.-based movie and   
   television website does not charge its Canadian subscribers a sales tax.    
      
   "We don't have employees, office, or assets in Canada and therefore are not   
   required to register for and charge GST to our Canadian customers," said   
   Netflix spokesperson Anne Marie Squeo in an email to the Star.    
      
   Netflix charges subscribers $8.99 a month. In Ontario, applying a 13 per cent   
   HST charge would add an extra $1.16 to the monthly bill.    
      
   So every year come tax time, an Ontario Netflix subscriber should, in theory,   
   voluntarily mail the taxman $14.02.    
      
   Danny Cisterna, an accountant at Deloitte who specializes in the GST, said   
   compliance is "probably low."    
   "It's probably more out of ignorance that people aren't doing this," Cisterna   
   said.    
      
   "Some people might know they have this obligation and then they actually don't   
   do it - that would be, in my mind, a form of tax evasion."    
      
   "We're talking about such small amounts of money on a per-subscriber basis   
   that, I mean, the reality is trying to pursue those kinds of cases just isn't   
   economical," said Michael Geist, who holds the Canada Research Chair in   
   Internet and E-commerce Law    
   at the University of Ottawa.    
      
   But even if the annual surcharge is chump change for an individual consumer,   
   it adds up to millions in uncollected tax dollars for the federal and   
   provincial governments.    
      
   "Roughly 40 per cent of English speaking households subscribe to Netflix,"   
   Geist said, estimating the company's Canadian revenues add up to hundreds of   
   millions of dollars.    
      
   In a submission to Finance Canada last summer, the Alliance of Canadian   
   Cinema, Television and Radio Artists (ACTRA) estimates Netflix would owe the   
   Canadian government $11 million a year in GST payments, and the provinces   
   another $15.6 million.    
      
   This input, the Finance Canada spokesperson says, "has helped shape Canada's   
   ongoing participation in the international discussions related to this issue."    
      
   Telecom giant Rogers, which owns the Canadian television streaming service   
   Shomi, said in its submission to the government that requiring foreign   
   suppliers to register and collect sales tax would "help level the playing   
   field."    
      
   Shomi costs $8.99 a month, the same as Netflix, but plus tax.    
      
   "You've got Canadian based services like Shomi and [CraveTV] in the video   
   space, which do collect and remit sales taxes because they're local, and in   
   effect face a 13 per cent disadvantage relative to Netflix because of the   
   tax," Geist said.    
      
   As for Netflix itself, the company refused to weigh in on the discussion.    
      
   "Netflix does not engage in electoral politics and has not had discussions on   
   this particular issue," spokesperson Squeo said    
      
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