On March 1, 2013, the British Columbia Ministry of Finance announced that the recently released legislative amendments to the Provincial Sales Tax Act have received Royal Assent and the regulations necessary to implement the new Provincial Sales Tax (“PST”), which takes effect on April 1, 2013, have been approved by Cabinet. The release of the regulations has been highly anticipated by organizations having to deal with this new tax, as they will provide many of the details necessary to fully understand how tax will apply in specific situations. In particular, these regulations will provide the necessary guidance that is needed to understand how certain exemptions will operate, when the new tax becomes effective.
The regulations have been released in two documents. The first document, titled the “Provincial Sales Tax Regulation”, provides much needed information on important concepts such as the purchase price, taxes in relation to tangible personal property, software and taxable services, and many of the provisions that relate to the administration of the PST. Administrative provisions detailed by these regulations include the filing of returns, records, penalties and interest, and offences.
The second document, titled “Provincial Sales Tax Exemption and Refund Regulation”, contains information that many taxpayers and advisors had been expecting to be released last fall. Included in these regulations are subjects focusing on the exemptions available under this new tax, including health and medical products, clothing, publications, safety equipment, farming, fishing and aquaculture, software, services and production machinery and equipment. These regulations also include specifics on various refunds that are available under this new tax, including those that relate to bad debts and multijurisdictional vehicles. These regulations also provide guidance on related party transactions, which will be of interest to organizations that transfer assets among various members of a corporate group. It is this second document that will be extremely important to the complete understanding of this new tax; to date very few details have been provided by British Columbia on these provisions.
In the upcoming weeks, Ryan will release specific details on many of the regulations that will be important to our clients.
Clients wishing to review the regulations to the new British Columbia Provincial Sales Tax should follow the links below: