PlayStation Store Purchases Will No Longer be Tax Free in Canada Starting Next Year

[Ghost 2,187]

Quote

Canadian game prices can sometimes be a bit hard to swallow, with new titles now costing $80 to $90, but at least there was a small silver lining for PS4 and PS5 owners, who haven’t had to pay any sales tax on games purchased digitally via the PlayStation Store. Considering sales taxes go as high as 15 percent in Canada, or nearly $14 on a $90 next-gen game, that’s a fairly significant deal. Well, fellow Canucks, it’s time to say goodbye to those savings.

 

The PlayStation Store not charging sales tax in Canada was due to a loophole in laws that stated only companies with a physical presence in Canada had to charge sales tax. So, Microsoft and Nintendo, which do have official Canadian branches, charge tax on digital games. Sony, which doesn’t, hasn’t had to. Well, according to Federal Finance Minister Chrystia Freeland, that exemption is going away. Starting next year everyone selling digital goods in Canada, including previously-exempt companies like PlayStation and Netflix, will have to start charging sales tax. Again, depending on which province you happen to live in, that will range from 5 to 15 percent on every digital purchase or subscription.

 

Having to pay sales tax is always kind of a drag, but if it makes you feel better, the extra money raised, which could amount to as much as $1 billion over five years, is being earmarked to fund a new Canada-wide childcare system.

 

The digital sales tax changes are schedule to go into effect on June 1, 2021, so enjoy those cheaper PlayStation games while you can.

 

WccfTech

Edited December 4, 2020 by Ghost

[LethalShark20 79]

Despite being a Canadian, I don't really care. I buy games physically.

[yowzagabowza 492]

Imagine buying a brand new game digitally and it costs a hundred moose bucks. 

 

Where im at, we've had to pay tax on digital stuff for years so it's nothing new to me. Tax rate is 7%, so it's kinda bad, but nothing like 15%. 

 

It WAS a loophole (sorta), and others have had to deal with it for a while now (xbox players) so it's not like they're sticking it specifically to PlayStation players.

[Solid-Fisch 444]

In Germany we pay 19% value added tax (currently a 16% Covid-19 exception) so I can only laugh about this...

[Evil_Joker88 1,643]

12 minutes ago, Solid-Fisch said:

In Germany we pay 19% value added tax (currently a 16% Covid-19 exception) so I can only laugh about this...

 

Well there's a difference though as when you go to a german shop and see 80€ for a new game that includes taxes already. If you go to a shop in Canada you see 80 CAD but the tax comes on top of it so it'll be significantly higher 😅 like they write in the quoted article it can be 14 CAD additionally...

 

I'm no Canadian but i did purchase a couple of games on the canadian store as it was cheaper than the US store but i guess the difference will be very small or gone soon

[Swotam 211]

Was nice while it lasted.

[Shinobi 2,104]

As a Canadian who primarily bought games digitally because of this reason (among other reasons as well), it was good while it lasted.

 

But it is what it is. Wasn't there rumors speculating that this was going to be happening at some point anyway? I guess it was just a matter of time...

 

 

[diskdocx 1,769]

I mean I don't like paying more, but really this loop hole shouldn't have existed so it is probably not an unreasonable tax.

 

Doubtful it will generate the amount of revenue that is projected by this government (which is generally incompetent with everything financial anyway), and it is annoying that it isn't going to a more worthwhile program, but it is what it is.

[MidnightDragon 15,041]

Ouch.  In my state, we were supposed to, but hasn’t happened on my end. Maybe since I only use prepaid cards? 

[Silver-I-Chariot 284]

Wow, thanks Obama Trudeau! 

[LoveInHell 1,408]

As if Canada isn’t already expensive enough.

[PooPooBlast 12,906]

FUUUUDGE. Another reason to add why the Digital-only PS5 is a no go for me.

 

This'll for sure affect how I buy games from the PS store in the future as a lot of the times I take into consideration taxes and resale value of the disc when thinking about buying a game from the PS store vs a local game store. Well it was great while it lasted.

[Lance_87 1,663]

51 minutes ago, Solid-Fisch said:

In Germany we pay 19% value added tax (currently a 16% Covid-19 exception) so I can only laugh about this...

 

Well, Italy is even worse. 22%, and we'll eventually go to 23% or 24% one day or another. Especially after this goddamn pandemic.

[TehUberCheezCatz 306]

what a buncha shit, guess i really aint ever buying aaa games on launch ever again

[scemopagliaccioh 649]

8 minutes ago, Lance_87 said:

 

Well, Italy is even worse. 22%, and we'll eventually go to 23% or 24% one day or another. Especially after this goddamn pandemic.

Do we even have videogame stores? Here in Naples more and more are closing because selling games  isn't profitable, since well, few people do for monetary reasons.

[dieselmanchild 751]

Well this sucks ass as games are already very expensive in Canada (think $90 for a physical copy of a new game, tax included). However, I always felt this loophole was too good to be true and probably wouldn’t last forever.

 

With how hard the coronavirus pandemic has hit the global economy, and how much money the Liberal government has spent non-stop on programs and benefits to save the Canadian economy, it’s not really all that surprising that the government is now looking for ways to generate extra revenue streams. And closing a loophole like this is an easy (albeit unfortunate for us) place to start.

 

I don’t really see this changing my purchasing habits though. I mostly buy digital anyways and tend to focus more on scooping up bundles of games in sales, rather than go for that new AAA title at full price.

[talespagni 1,029]

Try living in Brazil, where a new game costs $300 and a PS5 costs $5,000, while the minimum wage is $1,000.

[gruffiiti 783]

I had been purchasing more digital games lately for the convenience, savings and not having my wife question the amount of money i spent on the hundreds of game cases that would be on a shelf next to the TV. The third reason is definitely worth something to me.

 

That said... I do still buy physical games but the majority of those are larger titles and usually at good sale prices from the local shops. I can't say Ive really seen any good sales on games in the local stores though since the beginning of this year.

 

 

[BeautifulTorment 2,349]

They haven't been tax free for me in the last 6 months, in Canada, what gives?

[DaivRules 8,616]

7 minutes ago, talespagni said:

Try living in Brazil, where a new game costs $300 and a PS5 costs $5,000, while the minimum wage is $1,000.

If I lived in Brazil, Venezuela, or anywhere else with crazy high inflation among other things going on, video game costs would be the least of my concerns as every penny earned would be saved in an effort to move my family out of there. 
 

When the states here started charging sales tax, my state at 6% is pretty minimal, but goes up to 12% in some states. I don’t know if any figures have been released about how much money was exactly raised annually from the newly taxed categories 

[sepheroithisgod 1,145]

Luckily, Florida still doesn't tax on PSN.

[Caesar Clown 523]

20 minutes ago, BeautifulTorment said:

They haven't been tax free for me in the last 6 months, in Canada, what gives?

 

I only know Quebec charges provincial taxes on digital goods, but other provinces that don't have harmonized sales taxes might have been as well. Companies didn't have to charge GST on digital goods, and since some provinces merged GST with provincial taxes (Ontario is one), tax couldn't be collected in those provinces.

 

I guess there goes the tax-free games on PC as well.

[NERVergoproxy 5,029]

Digital sales better drop more to compensate for this!!

[TJ_Solo 925]

4 minutes ago, NERVergoproxy said:

Digital sales better drop more to compensate for this!!

 

 

lol

[peffsi 86]

Lol, this news drops 3 weeks after I bought my digital edition PS5.

The lack of taxes on PSN was a major reason I stopped buying physical copies.

Oh well. Personally speaking, I'm fully on-board with paying sales taxes for my entertainment products for the benefit of the country.

.. But it still stings to remember that I bought new release AAA games for $59.99 at the start of PS4 gen, but this gen it's gonna cost $89.99 + HST = $102 here in Ontario.