Tax rate by region British Columbia

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Tax in British Columbia: A Guide for SaaS Businesse

British Columbia features a layered sales tax structure where a 7% Provincial Sales Tax (PST) is applied alongside Canada’s federal 5% Goods and Services Tax (GST), resulting in a combined effective rate of 12% on digital products and services. For digital suppliers, compliance requires navigating two separate systems: the federal GST has an annual registration threshold of CAD 30,000, while the provincial PST mandates registration via the eTaxBC portal once taxable sales in British Columbia exceed CAD 10,000 over a 12-month period. Filing frequencies for both taxes scale with revenue, with BC PST returns and payments due on the final day of the month following the close of the reporting period.

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British Columbia

British Columbia layers a 7% Provincial Sales Tax (PST) on top of the federal 5% GST. BC PST applies to digital products including software, music, e-books, website design, web hosting, and subscription fees.

Official government link: Canada Revenue Agency

12.00%

E-products and services VAT/Sales tax rate

Tax applicable for

B2B and B2C

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

Federal GST: Once exceeding CAD 30,000 annual;

BC PST: CAD 10,000 in taxable sales annual

Online registration possible

Yes

Local representative needed

No

Registration procedure

Federal GST via CRA online; BC PST via eTaxBC 

List of digital and electronic services liable for tax

Software, music, e-books, website design, web hosting, subscription fees ; plus federal GST digital products

Penalties

Federal: late filing 1% + 0,25%/month.

BC PST: penalties for non-compliance per BC PST Act

Registration threshold

CAD 30.000 (federal GST); C

AD 10.000 (BC PST)

Filing interval

Federal GST: annual/quarterly/monthly by revenue.

BC PST: monthly, quarterly, semi-annual, or annual by revenue

Filing deadline

Federal: one month after period end.

BC PST: last day of the month following the reporting period.

E-invoicing requirements

Not mandatory

Record keeping

5 years per BC PST Act + 6 years per federal GST/HST (CRA)

How-To Guides: British Columbia SaaS VAT

Step: 1 Threshold

Effective July 1, 2021, Canada requires the following non-resident vendors to register for and collect the
federal GST/HST if their sales exceed CAD 30,000 in a 12-month period
• GST (Federal): $30,000 CAD in a 12-month period from sales to Canadian consumers (B2C). Registration is mandatory once exceeded.
• PST (BC Provincial): $10,000 CAD in a 12-month period from sales of software/telecom services to BC residents. Mandatory for non-residents.

Step: 2 Business Registration

• GST: Canada Revenue Agency (CRA) via the “Simplified GST/HST” portal for non-resident digital service providers.
• PST: BC Ministry of Finance via the eTaxBC portal.

Step: 3 TIN/VAT Number

• GST Number: 9-digit Business Number (BN) with “RT” program identifier
• PST Number: 11-character ID

Step: 1 Standard Rate

The sales tax rate in British Columbia is:

• GST: 5% (Federal)
• PST: 7% (Provincial)
• Total Tax: 12%

Step: 2 VAT Formula

To calculate your tax amount, please use the following formula:

 

Tax Amount = Net Price x 12%
(Calculated as $5\% + 7\%$, not compounded).

Step: 3 Reverse Charge (B2B)

• GST: Does not apply to B2B if the buyer provides a valid GST registration number. The buyer “self-assesses” if they are not using the SaaS for commercial activity.
• PST: No formal “reverse charge” for non-residents; if the vendor is registered, they must collect it from businesses unless a specific exemption certificate is provided.

Step: 1 Selling B2C

Always charge 5% GST and 7% PST. You must obtain two pieces of non-conflicting evidence (e.g., IP address, billing address) that the buyer is in BC.

Step: 2 Selling B2B

• GST: Do not charge GST if the buyer provides a valid GST/HST registration number. Maintain a record of the buyer’s number.
• PST: You must charge 7% PST unless the buyer provides a PST Registration Number or a completed Certificate of Exemption (e.g., for software purchased for resale).

Step: 3 Invoice Requirements

Invoices must include:
1. Supplier legal name
2. GST and PST registration numbers
3. Date of issue
4. Description of service (SaaS)
5. Total amount
6. Breakdown of GST (5%) and PST (7%) amounts.

Step: 1 Filing Interval

• GST: Usually Quarterly or Annually (set by CRA upon registration).
• PST: Monthly, Quarterly, or Semi-Annually based on tax volume.

Step: 2 Filing Deadline

• GST: One month after the end of the reporting period.
• PST: The last day of the month following the end of the reporting period.

Step: 3 Submission

• GST: Electronically via CRA My Business Account or Simplified GST/HST portal.
• PST: Electronically via eTaxBC. Payments via Electronic Funds Transfer (EFT) or wire.

Step: 4 Record Keeping

Minimum 6 years from the end of the last tax year they relate to.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating British Columbia’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

Overwhelmed by SaaS sales tax compliance?

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