Return To The Provincial Sales Tax In British Columbia
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Return To The Provincial Sales Tax In British Columbia

Following the defeat of the Harmonized Sales Tax (HST) in the August 2011 referendum, the British Columbia Government announced that it plans to re-implement the Provincial Sales Tax (PST) on April 1, 2013, about 19 months after the referendum, well within the timeline of 18 - 24 months estimated by the HST Independent Panel in their May 2010 report.

The PST system being reintroduced will essentially be the same system that was in place in June 2010 when the HST was implemented. The federal HST will now be replaced by the Goods & Services Tax (GST).

Some quick facts for those who don't remember the PST system: PST rate: 7%; GST rate: 5%

PST will apply on the following:

  • the purchase or lease of new or used goods;
  • goods brought into BC for use in BC;
  • the purchase of most services to goods (for example, vehicle maintenance, furniture assembly, computer repair);
  • the purchase of telecommunication services including internet access, non-basic cable, non-residential telephone services, cell phone use, satellite services and facsimile services; and
  • the purchase of legal services.

PST exemptions will return, including:

  • all food for human consumption (e.g. basic groceries and prepared food such as restaurant meals);
  • most services (e.g. personal services such as haircuts, dry cleaning, funeral services);
  • admissions and memberships;
  • bicycles;
  • newspapers and magazines; and
  • all permanent PST exemptions for business (e.g. items purchased for re-sale).

For businesses, the biggest difference will be that unlike the HST where the 12% paid on any purchase was eligible to be claimed back via the Input Tax Credit (ITC) system, businesses will NOT be able to claim back the 7% PST as an ITC, only the 5% GST will be available for the ITC. Essentially, any goods or services that attract PST will cost businesses 7% more.

Businesses will be required to re-register for a new PST number; the old PST registration number will not be valid. The registration information is expected to be available in December 2012, the government will be sending out letters to businesses at that time informing them on how to register. An online registration and e-service system is being developed at this time to support registration as well as filing of returns, payments and other account maintenance functions. This system is expected to be up and running by January 2013.

Further announcements by the government regarding some of the transitional measures will be forthcoming in the months ahead.

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About the Author
Gloria Terhaar
CCS (CA/US), CTCS, LCB

Gloria Terhaar began her customs brokerage career in 2002 and soon after joined PCB Global Trade Management. Since her start date in 2007, Gloria Terhaar has forged an impeccable reputation working progressively from an operations role to her current responsibilities as Trade Compliance Supervisor and a Regulatory Analyst. In these roles her in-depth knowledge of regulatory requirements relating to imports into Canada ensures that our company’s practices are developed and updated to operate within government regulations. She is a dependable, approachable problem-solver and critical thinker with the resilience to tackle and handle many job responsibilities in an agile manner. Gloria enjoys educating others about Importing and has spoken at talks for MNP, the Surrey Board of Trade, TFO Canada, the BC Produce Marketing Association and various importers. She also represents PCB on the Canadian Produce Marketing Association Government Issue Management Committee and participates in annual advocacy events, where she advocates to Government officials for the Canadian produce industry. Recently, she was also accepted to participate on the CSCB task force related to the CBSA Assessment and Revenue Management (CARM) initiative. Gloria's passion for customs brokerage is shown in her commitment to educating trade chain partners about the industry and keeping abreast of the ever changing landscape of Acts, Regulations and policies that affect trade.

While we strive for accuracy in all our communications, as the Importer of Record it is incumbent upon your company to ensure that you are aware of the requirements under the new regulations so that you maintain compliance as always.