In principle, physical goods are subject to PST. If your business sells tangible property as a physical product, you`ll likely have to charge PST on it. Examples of taxable items exempt from PST include: If you are registered as a PST seller and collect and transfer PST for your taxable sales, you do not have to pay PST for items you purchase for resale. When you sell these items, you collect pst on them and transfer the PST to the Treasury. You will still have to pay pst for the goods and services consumed in your business. Obtain and complete a business consent form to give a taxpayer representative access to your account information. On the 22nd. February 2022, British Columbia, BC The Ministry of Finance has released its 2022 Budget and related legislation proposing new rules for the province`s sales tax (PST) with respect to “online marketplace intermediaries.” These new rules effectively make online market intermediaries vulnerable to the collection and transfer of PST for sales by market sellers through online sales platforms. The new rules also consider that many of the services provided by online marketplace intermediaries to their sellers are taxable. The rules are due to come into force on July 1, 2022. British Columbia is the latest VAT jurisdiction to implement online platform rules for e-commerce businesses, with the Canadian federal government implementing amended rules in July 2021, Quebec in January 2019 and July 2021, Manitoba in December 2021, and Saskatchewan in January 2020. For a business outside of British Columbia but in Canada, check out our article on out-of-province sellers. No, you do not need a representative to manage your taxes in British Columbia.
This means you don`t need to have one. Some shy owners of foreign companies may hire a tax representative to be reassured. Taxes can be an intimidating and confusing topic, especially in a foreign language! That makes perfect sense. The application of PST to these services contrasts with the rules of the online marketplace in Saskatchewan and Manitoba, where these types of services are generally not considered taxable under the respective provincial VAT regulations. All businesses operating in Saskatchewan must be licensed or registered with the Treasury Department for PST purposes. As previously mentioned, British Columbia is the last Canadian VAT jurisdiction to implement online platform rules for online marketplace intermediaries. Like the other PST provinces (Manitoba and Saskatchewan), it adopts a version of the rules that is different from the GST/HST and QST – these taxes are only levied and transferred by the market operator if the market vendor is not registered to collect taxes. However, unlike other PST provinces, British Columbia levies taxes on a variety of platform fees. The patchwork of conflicting rules in Canada makes compliance particularly difficult for non-resident platform operators attempting to program systems across multiple jurisdictions to collect and pay taxes in accordance with laws that purport to apply to non-residents outside their borders. For more information, please contact: Zvi Halpern-Shavim 416-863-2355 David Lam 416-863-2733 or another member of our Steering Group.
Unlike the GST/HST, there are no pre-tax PST credits for goods purchased from a business. No matter where you live or where your online business is located, if you have customers in British Columbia, you must follow the rules of the British Columbia SDS. That`s what this guide is for! This guide includes everything you need to know about digital tax laws in British Columbia, whether your clients live in Prince Rupert or Fort Nelson. Use this online service to verify that the businesses you are dealing with have met this requirement and have an active license or consumer number registered with a PST provider. Ultimately, you will receive a PST registration number that will establish you as a legal business in the British Columbia tax system. This number tracks your business through the system: the taxes you pay, the tax credits you receive, plus the tax you charge customers. But once your local sales exceed $10,000, you may need to register for VAT and comply with all B.C. rules regarding the tax rate and collection, bills, and filing tax returns. Please contact the British Columbia Revenue Authority for more information.
Pst is the excise tax throughout British Columbia that is levied on almost everything sold in the province. There are specific rules for digital products that you need to follow closely to stay tax compliant. If your client is a co-contractor and has provided a valid PST number, there is no need to add and collect taxes! The purchaser will process the taxes through British Columbia`s reverse charge mechanism. The following types of businesses do not need to register to collect PST (see PST bulletin 001 below): New as of April 1, 2021: There are new registration requirements for businesses outside of British Columbia. See PST 001 Registring to Collect PST (link below). Yes, you must pay pst for all goods you purchase for professional or personal use, unless otherwise specified (e.g. goods purchased for resale). In general, you pay pst when you buy or rent taxable goods from your supplier. If your provider does not charge you PST, you will need to assess the PST due yourself.
These exceptions and rules may apply to your business in combination. For example, as a landscaper, you will have to charge pst for the material products you sell, but any work you do on anything associated with real estate, such as a house, is exempt from PST. Another example is photography. All photo shoots with images sent via email are PST-free, but once tangible media is introduced, pst must be calculated on hardware media such as printed images or CDs. Businesses operating in Saskatchewan must register for a PSD number. Depending on the type of business, a supplier`s licence number or a registered consumer number is issued. The main purpose of the above descriptions is to highlight the variability and complexity of the DVT rules. To be sure of the PST rules that apply to your business, you should talk to your accountant to make sure you comply with your company`s PST responsibilities. The first requirement you need to check is whether you actually need to charge PST for taxable items.
You are not required to calculate and collect PST if your gross annual income for the last completed year or your expected gross annual income for the current year is less than $10,000. If your gross income is less than $10,000 per year, you qualify as a small provider and do not need to calculate and collect PST. If your business sells more than $10,000 in taxable property per year, you will need to register for PST. In British Columbia, foreign corporations are expected to file tax returns on a quarterly basis. Follow these steps to archive pst in British Columbia. As a small supplier, you have to pay PST for the purchase and lease of equipment and consumables used to run your business. If the items were brought out of province and the PST was not picked up by the seller, you will need to return them. Tax Tip: If you are not sure if registration is required, contact the Consumer Tax Branch! Once the applicability of the tax for your sales has been established, you must charge pst for the sale and transfer the TRP for the sale within the respective submission deadline for that date. Like the GST, this tax must be transferred or paid to the government, regardless of whether the sale was collected or not. If you later find that the sale is uncollectible, you can write off the debt from that sale and claim PST for the sale on your next PST return.
So, essentially, you don`t have to pay PST for sales that you don`t collect, although there is a difference in cash flow timing because you originally have to pay the PST when the sale is made and then get it back in a later PST return. No, the rental of real estate is not subject to PST. These include leases for bare land, farmland, commercial and retail space, storage space, and long-term housing (more than one month).