VANCOUVER, March 6, 2013 /CNW/ - Love it or hate it, on April 1, 2013
British Columbia will move from having a 12% HST to a 5% GST and a 7%
PST. "As a businessperson in BC, it's time for you to consider how the
change will affect you and what you need to do to prepare," according
to Heather Weber, Tax Partner with MNP who is based out of Kelowna, BC.
First you'll need to evaluate whether you will be required to charge
PST. PST will generally apply to sales or leases of tangible personal
property (things you can touch and feel). It will also apply to
software, services to goods, accommodation, legal services,
telecommunication services and gifts of boats, vehicles and airplanes.
All taxable goods and services acquired outside of BC and brought into
the province after April 1, 2013 will also be subject to PST.
The exemptions we had under the previous PST will be re-implemented,
including restaurant meals, bicycles, newspapers and magazines, dry
cleaning and most services.
Once you've determined that the PST will be applicable to your business,
you will need to obtain a new PST registration number. This can be done
online through eTaxBC (www.etax.gov.bc.ca).
The general rule for when PST becomes payable is the earliest of:
The date the seller issues an invoice
The date of that invoice
The day the seller would have issued an invoice without delay
The day the purchaser is required to pay the considerations pursuant to
a written agreement
It's up to you to ensure that your internal systems are in place to
correctly charge and apply the tax when necessary. This may require a
review of internal processes and training for staff so that your key
personnel are aware of when the tax is applicable.
Ongoing contracts such as long-term leases will need to be reviewed to
ensure that the taxes are adjusted to reflect the return to GST and the
new PST. This is important to ensure you collect the right amount of
tax, but is also a consideration for businesses that are purchasing
supplies and goods. Unlike HST, the new PST is not recoverable as an
input tax credit.
Businesses that are involved in real property contracts will need to
review those contracts to see if their quotes need to be adjusted.
Costs will change after April 1, 2013.
Where a contractor acquires goods after April 1, 2013 for use in a real
property project, PST will be payable. Also, if the contractor uses
goods after April 1 and PST is not otherwise payable, he or she will be
required to self-assess PST when the goods are incorporated into a
This is just a brief overview of some of the rules and information you
should consider as we transition back to the PST. Please consult a tax
advisor for advice on how the above information should be applied to
your particular business.
MNP is one of the largest chartered accountancy and business consulting
firms in Canada, providing client-focused accounting, taxation and
consulting advice. National in scope and local in focus, MNP has
proudly served individuals and public and private companies for more
than 65 years. Through the development of strong relationships, MNP
provides organizations with personalized strategies and a local
perspective to help them succeed. For more information, visit www.MNP.ca.
SOURCE: MNP LLP
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