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PST in British Columbia - Explained

November 16, 2021


What is the Provincial Sales Tax (PST) in British Columbia (BC)?


In Canada, there is a federal sales tax called the Goods and Services Tax (GST). Most provinces have combined their federal sales tax with their PST to only charge one tax called the Harmonized Sales Tax (HST). However, there are some provinces that still have PST: BC, Saskatchewan, Manitoba and Quebec.


The BC PST has different rules from the GST/HST. Generally, the GST/HST is charged and collected on most products and services (see FAQ Taxable, Zero-Rated and Exempt Supplies for further information) and when GST/HST is paid it can be claimed back on your GST/HST return. The PST in BC is generally charged when a taxable good, software or service is obtained for personal or business use unless there is an exemption. The BC PST general rate is 7% but can be higher on certain items (i.e. 10% on liquor).

Examples of taxable items: purchase or lease of new or used goods, goods for use in BC, purchase of software, services to or to install taxable goods (i.e. car maintenance, oil changes, furniture repairs), soda beverages, alcoholic beverages and telecommunication services.

Examples of non-taxable items: improvements to real property, food for consumption, electricity, books, magazines, clothing and footwear for children under 15 years of age, goods shipped outside of BC, cleaning services, hairstyling, veterinary services and automobile towing.

One common PST exemption claimed is on the purchase of goods for resale. The buyer must provide the seller with their BC PST number or complete an exemption certificate for the PST to not be charged on the sale. If a BC PST number is not provided or an exemption certificate is not completed, then PST will be charged on the taxable goods even if they will be resold.

Unlike GST/HST, if you pay BC PST you cannot claim it back and offset it against PST collected. Instead, the PST paid becomes part of the expense paid. You may be eligible for a small commission (up to $198) to reduce the amount of PST owing. The amount of commission is calculated on your BC PST return.

There are various criteria by which a business is required to register for PST in BC. The criteria are different depending on:

  • If a business is located inside BC,
  • If a business is located outside BC but within Canada, or
  • If a business is located outside BC and outside Canada.

For example, businesses located outside BC but within Canada have to meet multiple conditions before being required to register, one of which requires the company to either solicit persons in BC for orders or to have gross revenues sales from BC customers of more than $10,000 annually.

However, businesses are not required to register for BC PST if they do not make taxable sales of goods, software or accommodation; do not make taxable leases of goods; or do not provide taxable services. For example, if you only sell items to distributors and do not have retail sales, you would not have to register for PST in BC.

If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.

Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.

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