New tax law regulation in Canada

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Updated:

On 1st July 2020, telecommunications software and services suppliers will be imposed a new tax in British Columnia. Discover its applications.

The province of British Columbia in Canada now imposes a new provincial sales tax (PST) on non-resident suppliers of electronic or digital services.

In its 2020 Budget and Tax Plan, dated February 18, 2020, the Province of British Columbia, Canada, announced the introduction of new taxes that will take effect July 1, 2020, and will require certain non-residents of Canada to register as PST collectors. Specifically, this affects both Canadian and non-Canadian vendors of telecommunications software and services (other than small suppliers), who may be required to register if their annual revenues from sales in British Columbia exceed $10,000, even if they do not have a permanent establishment or business in Canada.

The key point to remember:

Levied as of July 1, 2020, this 7% PST will apply to both resident and non-resident suppliers of electronic services. 

This includes the following:

  • Streaming platforms such as Netflix,
  • Software,
  • E-books,
  • Apps,
  • Online webinars,
  • The E-learning,
  • Remote gambling,
  • Subscriptions, online members clubs,
  • Subscriptions to online journals.

In other words, all online telecommunication services, but also products from the electronic cigarette.

Good to know:

Imposed on consumers of specific goods and services, provincial sales tax (PST) takes effect in many Canadian provinces.

In addition to the PST, many Canadian provinces must apply the 5% federal goods and services tax. Still have questions, need more information? Contact our ASD Group tax experts in Canada. More information on the new PST-related measures in Quebec.

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