The reimplementation date of PST in British Columbia is rapidly approaching. Specifically, April 1, 2013 is the date on which businesses will need to transition from charging 12% HST to 7% PST and 5% GST. In basic terms, anything invoiced to a customer after April 1, 2013 must include PST if the goods or services are taxable for PST purposes.
If you are currently registered for HST, consider making business purchases before the April 1, 2013 reimplementation date in order get a refund of the 12% HST as opposed to only 5% GST after April 1.
What goods and services are taxable?
The re-implemented PST will be a retail sales tax that is payable when a taxable good or service is acquired for personal use or business use, unless a specific exemption applies. The application of the tax will be almost identical to the previous version of PST.
What goods and services are exempt from PST?
Similar to the old PST, the new PST does not impose tax on things such as:
- Real property (residential housing or commercial real estate);
- Admissions and memberships;
- Professional services (other than legal services);
- Transportation fares (e.g., bus, train, ferry, airline)
In addition, all permanent exemptions from the PST will be re-implemented with the new PST, including:
- Food for human consumption (e.g., basic groceries and prepared food such as restaurant meals);
- Books, newspapers and magazines;
- Children’s clothing;
- All permanent exemptions for business.
Registering for the new PST
Businesses will need to register for the new PST, or re-register and obtain a new PST number if they were previously registered. Registration can be done on-line (click here), or by mail/fax.
There are various transition rules that apply to real estate transactions and as well as the reimplemenation of self assessment rules on the importing of taxable supplies. These areas can be complicated. Please contact our office if you need assistance with understanding these areas as they apply to your business.
The BC provincial government has created a website dedicated to the transition back to PST. It can be located at www.pstinbc.ca. This website is a good starting point for understanding the transition to the new PST.
We encourage you to contact any one of our offices for more information or to arrange a meeting to discuss how this change will impact your business.
Contributed by Peter MacIntosh – Partner, White Kennedy