AsianFin -- U.S. tech giants narrowly escaped a multibillion-dollar tax hit after Canada backed off implementing a controversial digital services tax that had been set to take effect retroactively.

The tax, introduced in 2024, would have required companies like Google, Meta, and Amazon to pay roughly $3 billion upfront this week, covering revenues dating back to 2022. It also proposed a 3% levy on all future revenue from digital services tied to Canadian users.

According to the Computer & Communications Industry Association, the measure could have cost U.S. firms $900 million to $2.3 billion annually and put up to 3,000 Canadian jobs at risk.