Tax Alert | British Columbia Updates Software and Telecommunication Services Bulletins

British Columbia has updated Provincial Sales Tax (PST) Bulletins PST 105, “Software,” and PST 107, “Telecommunication Services,” to clarify that the definition of “software” for PST purposes includes cloud computing products, specifically infrastructure as a service (IaaS) and software as a service (SaaS). These updates reflect a legislative change that is retroactive to April 1, 2013.

The addition of SaaS and IaaS to the definition of software is undoubtedly in response to the March 2023 Hootsuite Inc. v. British Columbia (Finance) [2023 BCSC 358] decision, in which the court found that these services were not subject to PST.

The new definition of software further widens the application of PST to include not only application software, systems software, video games, and mobile device apps, but also various virtual services, such as online data processing, access to online databases and computational services, electronic storage, and various other infrastructure services.