In British Columbia’s Provincial Sales Tax (PST) Notice 2012-016, “Related Services”, the province provided some guidance on the definition of related services. These services are subject to the new PST in the province, effective April 1, 2013.
Related services are defined as those provided to tangible personal property (goods), such as repair, adjustment, restoration, reconditioning, refinishing and maintenance services, and services to install and/or dismantle goods. Generally, if the tangible property is subject to the PST, related services performed on that property would also be subject to the tax. The definition appears to be somewhat similar to the definition of ‘taxable services’ under the former Social Service Tax in place in the province prior to July 1, 2010.
In the unique situation that goods are sent out of British Columbia to a service provider that will perform a related service on the property after which time, the property is brought, sent, or received into British Columbia, PST will apply on that service.
Notable examples of some related services that would not be taxable due to a PST exemption are listed below:
- Services performed to install goods that will become an improvement to real property;
- Services to goods that a PST registrant possess for the purpose of resale or lease;
- Services to manufacture goods that are fundamentally different from the goods used in the manufacturing process;
- Services to most affixed machinery;
- Cleaning services; and
- Services to clothing and footwear.
No PST would generally be applicable to the types of services listed above. The province also indicated that more information will be released on exemptions in future bulletins and notices.
Please refer to the bulletin for more examples of services exempt from PST under this definition, and further information of related services.
BC Notice 2012-016