What are the new PST transition rules and when do they apply?
The province finally released long awaited information yesterday. PST is set to be reintroduced into BC on April 1, 2013. There are a number of rules that have been created to explain the introduction of PST across the transition date.
PST will apply to tangible goods purchased or leased in BC, and goods bought, sent or delivered to BC to be used in BC. It will also apply to software, accommodation, legal services and gifts. PST does not apply to services.
In most cases the transition rules are fairly straightforward. PST will apply when consideration is due, which is the earliest of:
- The date the invoice is delivered to the customer
- The date printed on the invoice
- The day the invoice would have been issued but for undue delay
- The day payment is required pursuant to a written agreement.
There are a few differences, some of which are listed below:
- PST does not apply on lease payments before April 1, 2013, but does apply to payments after April 1, 2013.
- For goods bought or sent into BC from outside Canada, PST will apply if the date the goods enter BC is on or after April 1, 2013.
- Items bought, shipped or received in BC by a BC resident are subject to PST if consideration is due on or after April 1, 2013. For example, you have purchased some parts from a supplier in Alberta and these parts are to be delivered over the course of the year, and the supplier will invoice you as the parts are shipped. Those parts received after April 1, 2013, will be subject to PST.
- For contractors using goods to improve real property, if PST is not payable on the goods when originally purchased and the goods are used in BC then PST is payable if they are used on or after April 1, 2013. So if you buy inventory prior to April 1, 2013, and then attach it to real property on or after April 1, 2013, PST applies.
These transition rules do not deal with transitioning out of HST.
If you have questions the PST transition rules, please contact us for our help on this issue. Editors comment:
It seems to make sense to try to get invoiced before the PST re-implements as you will avoid the PST on items.Download a copy of this issue here