ORIGINAL POST:
A significant expansion of the British Columbia Provincial Sales Tax (“BC PST”) was announced by the BC Ministry of Finance earlier this year as part of BC Budget 2026. The Budget announced a new broad application of BC PST to various professional services, effective October 1, 2026.
Few details were provided at the time of the announcement; however, additional regulations were released on July 9, 2026, which clarify how BC PST will apply to these services, including under which circumstances the services will be exempt from BC PST.
The purpose of this newsletter is to bring awareness to the changes, both for service providers and for their clients, and to provide an overview of the important transition rules that apply as the new rules come into force.
Affected services
Businesses and individuals providing any of the following services need to take action to determine if they must begin charging 7% BC PST on their services:
You can find detailed bulletins, which outline the types of services subject to BC PST, as well as the various exemptions available, at the BC Ministry of Finance’s website: https://www2.gov.bc.ca/gov/content/taxes/sales-taxes/pst/publications/notice-professional-services
Transition rules
7% BC PST will apply to all affected services invoiced on or after October 1, 2026, even if the invoice relates to services performed before that date.
BC PST will not apply to the affected services if an invoice becomes due or is paid before October 1, as long as the invoice relates to services completed before December 1, 2026. In some cases, service providers may opt to issue interim invoices prior to October 1 for services provided up to and including September 30, or issue advance invoices for services to be performed during the October 1 to December 1 transition period. It’s important to note, however, that if any portion of the services invoiced prior to October 1 is performed on or after December 1, 2026, the portion of the consideration attributable to services performed on or after October 1, 2026 will be subject to BC PST.
Action required
Businesses affected by the expanded BC PST rules will need to determine which of their services are subject to BC PST, and ensure they become registered prior to October 1, 2026. They will need to update invoicing practices and ensure proper procedures are in place to collect and remit BC PST in a timely manner, as late filing of returns and/or late remittance of tax can carry severe penalties.
Businesses and individuals acquiring affected services need to be aware of the obligation to pay 7% BC PST on the affected services. In some cases, purchasers may be required to self-assess BC PST where they are not appropriately charged the tax by the service provider.
If you have any questions regarding the BC PST changes, please contact your D&H Group advisor.
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