30 March 2022
In February 2022, the Canadian province of British Columbia (BC) announced changes to provincial sales tax (PST) rules regarding sales via online marketplaces (OMP).
The new rules will apply from 1 July 2022 and will mean OMPs (such as Amazon and eBay) will be required to charge, collect, and pay PST on taxable sales made through their online marketplace websites. These new rules will affect the following supplies:
- Goods that at the time of sale are located within Canada and are sold to customers in BC
- Software for use on or with an electronic device situated in BC
- Accommodation services in BC.
- Taxable services, other than accommodation, to a person in BC
This also means that due to the OMP being required to register and collect PST on these types of transactions, the seller will no longer be required to register and collect PST on these types of sales.
In addition to the above rule changes, OMP services will also be considered as a taxable service with PST at 7% applied. An online marketplace service is defined as any of the following provided by the OMP:
- Listing sales of goods, software, or sales of taxable services
- Advertising or promoting
- Customer service
- Fulfilling orders or bookings
- Collecting or facilitating payments either directly or indirectly, and transferring payments to the marketplace seller
- Accepting or assisting with cancellations, changes, returns or exchanges of goods, software, or taxable services
- Other services to facilitate an online marketplace seller’s sale of goods, software, or taxable services through the online marketplace.
If you need help understanding and applying these new rules, please get in touch here.
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