The 2026 British Columbia Budget introduces significant changes to the province’s Provincial Sales Tax (PST) regime, marking one of the most notable expansions of the tax base in recent years. In an effort to broaden revenue sources and modernize the application of PST, the Government of British Columbia has announced that several professional services will become taxable for the first time, while certain long-standing exemptions on goods and services will be eliminated.
Effective October 1, 2026, the 7% PST will extend to a range of specified professional services, including accounting, architectural, engineering, and non-residential real estate services, among others. The Budget also removes exemptions on select goods and telecommunications services and introduces new rules permitting point-of-sale exemptions for goods shipped out of the province by purchasers.
These measures will have broad implications for professional service providers, businesses, and consumers across the province. Below, we outline the key changes and what they mean for compliance, registration, and tax planning going forward.
1. PST expanded to specific professional services
British
Columbia (BC) 2026 Budget has introduced an extension of the provincial
sales tax to specific professional services. PST, at a rate of 7%, will
be extended to the following specific professional services effective from
October 1, 2026:
·
Accounting services, which
encompass bookkeeping and assurance services
·
Architectural services
·
Engineering and geoscience
services
·
Non-residential real estate
services, which include trading services, rental property management services,
and strata management services
·
Security services,
including private investigation services
According to the proposed
legislation, the PST on architectural, engineering, and geoscience services
will be levied on 30% of the purchase price of these services. Businesses
offering these services will be required to register for the collection and
remittance of PST to the BC Ministry of Finance, unless a specific exemption is
applicable.
Registration can be completed up
to six months prior to the first taxable sale. For instance, if an entity is
not presently registered but intend to sell newly taxable professional services
on October 1, 2026, they may register starting April 1, 2026 (but not earlier).
If registration is necessary, it must be completed online.
Further information will be
provided by the Ministry regarding the application of PST and its exemptions to
these professional services.
2. PST exemptions will be removed for specific goods and services
Effective from October 1, 2026,
the following PST exemptions will be discontinued:
· Clothing patterns, yarn,
natural fibers, synthetic thread, and fabric typically utilized in the creation
or repair of clothing
· Services associated with
clothing and footwear (basic laundry services will continue to be exempt)
· Basic cable television
services, residential landline telephone services, and toll-free telephone
services
Further details, including
transitional regulations, will be made available by the Ministry closer to
October 1, 2026.
3. Goods Shipped Out of B.C. by the Purchaser
Effective February 18, 2026,
amendments to the Provincial Sales Tax Act and the Provincial Sales Tax
Exemption and Refund Regulation will permit sellers of goods to offer a
point-of-sale exemption or refund within 180 days to businesses acquiring goods
for business purposes outside the province. This new exemption will enable the
purchaser to arrange for the shipment of goods from B.C. rather than
necessitating the seller to handle the shipping. Both bulletins PST
309 and PST
400, have been updated to reflect the new changes.
For more information or inquiries
kindly reach out to us at insights@dominionaudit.com.