News and Insights

BC Issues Bulletin PST 506, “Real Property Situated Outside BC”

Tax Development Jun 26, 2014

In addition to the bulletins previously published related to real property and real property contractors (PST 500, 501, 502, 503 and 599), British Columbia (“BC”) has issued another bulletin discussing how tax applies to goods used by contractors to supply and affix, or install, goods that become part of real property situated outside the province.

Generally speaking, goods purchased outside BC for use outside the province are not subject to the Provincial Sales Tax (“PST”).  However, self-assessment of the tax is required if goods are brought into, or received in, the province.

Conversely, goods purchased in BC are usually taxable, even if the real property they will be affixed or installed into is located outside BC, unless a specific exemption applies; for example, where:

  • goods that have never been used in BC are shipped out of the province by the seller; or
  • the written contract is with a person exempt from PST.

The province  has made it clear that the PST liability cannot be transferred to supply and install customers outside the province using the exception otherwise available, where a customer has agreed, in writing, to pay the PST.

A refund may be available if the goods are shipped out of the province without being used in BC (except for storage).  As indicated by the examples provided in this bulletin, even if minimal preparatory work is performed on the goods prior to their removal from BC, it would make it ineligible for a PST refund.  To apply for a refund, form FIN 355, Application for Refund – General, along with proper supporting documentation, must be filed with the Ministry.

Bulletin PST 506