Canada: British Columbia introduces tax on digital services

Aug 31, 2020 | Digital Services, VAT Updates

VAT Updates America

The Canadian province on British Columbia has introduced the obligation to charge Provincial Sales Tax (PST) on income earned by non-resident providers of digital services. Check Avalara’ global VAT on digital services tracker.  BC’s PST is 7%.

There is no major federal level Canadian GST charge on digital or elecronic services.

This new BC tax applies to sales of software and telecommunications services. Only businesses with annual sales in BC above C$10,000 will be liable to register and charge PST

The measure was to be introduced on 1 July 2020, but was delayed due to the COVID-19 pandemic. The new implementation date is to be confirmed.

Currently, non-resident businesses providing digital services in British Columbia do not have to charge PST on their sales. However, in an effort to remove the unfair advantage this gives non-resident companies over resident providers, the Canadian Revenue Agency has confirmed PST will be applied on these types of supplies at a rate of 7%.

 

Source – Avalara

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