British Columbia has issued form FIN 406, “Designation Agreement or Cancellation,” for principals and agents that seek to jointly designate one of the parties (either principal or agent) to collect and remit applicable Provincial Sales Tax (PST) and Municipal and Regional District Tax (MRDT) on sales and leases made under the designation agreement.
As communicated by the province, when a designation agreement is related to accommodation, it is applicable to both PST and MRDT. The non-designated party is not required to register to collect PST for sales and leases made under the designation agreement and should not charge and collect PST on these transactions. A non-designated party is required to charge, collect, report, and remit any applicable PST and MRDT on sales and leases made outside of the designation agreement.
The province has updated Bulletin PST 001, “Registering to Collect PST,” to include information on designation agreements.