Amazon said on Tuesday that it "applauds" Canada's decision to scrap its digital services tax in order to salvage trade talks with the United States, calling it a win for the online retailer's customers.

The digital services tax, enacted last year, would have seen US technology giants such as Amazon on the hook for a multibillion-dollar payment in Canada by Monday, analysts have said.

US President Donald Trump had slammed the tax and called off trade talks with Ottawa, which reversed course and binned the tax on Sunday.

The tax had been forecast to bring in 5.9 billion Canadian dollars (US$4.2 billion) over five years.

"Amazon applauds Canada's decision to rescind the Canada Digital Services Tax Act," an Amazon spokesman said.

"Digital services taxes are discriminatory, stifle innovation, and harm consumers, and we appreciate the US government's work to address DSTs around the world," he said.

Austria, Brazil, Britain, France, India, Italy, Spain and Turkey are among a dozen large countries that have imposed or planned to impose special taxes on big tech firms.

The goal is to force them to pay taxes where they carry out business as well as to counter the strategies they often use to reduce their tax bills. (AFP)