Provincial Sales Tax. Trusted financial and economic leadership for a prosperous province

Transcription

1 Provincial Sales Tax Trusted financial and economic leadership for a prosperous province

2 Today s Topics PST - the basics Taxable Purchases & Tax Rates Real Property Contracts Exemptions & Refunds Rulings, Audit & Appeals Registration, etaxbc & Filing Returns Resources & How To Contact Us Q & A 2

3 Provincial Sales Tax Provincial sales tax (PST) is a retail sales tax that applies when a taxable good or service is purchased, acquired or brought into B.C., unless a specific exemption applies. Small Business Guide to PST 3

4 Taxable Purchases & Tax Rates 4

5 What s Taxable purchase or lease of new and used goods software goods brought, sent, delivered into BC for use in BC legal services accommodation telecommunication services related services gifts of vehicles, boats and aircraft 5

6 Examples of Taxable Goods 6

7 Business Assets PST must be collected and remitted on the sale or lease of business assets, unless a specific exemption applies. Bulletin PST 005 Buying and Selling a Business For PST purposes, a taxable sale occurs when taxable assets are transferred, unless a specific exemption applies. Bulletins PST 200 and PST 210 7

8 Tax Rates Generally, the rate of PST is 7% accommodation 8% plus up to 3% municipal and regional district tax vehicles 7%- 10% or 12% boats 7% or 12% aircraft 7% - 12% liquor 10% manufactured buildings 7% of 45%, 50% or 55% of the purchase or lease price 8

9 Related Services Related services are services to repair, adjust, restore, recondition, refinish, maintain and install Tangible Personal Property (TPP). Generally, if a good is taxable when purchased, services provided to that item are also taxable. Bulletin PST 301, Related Services 9

10 When is Tax Payable? General Rules payable when consideration for the goods becomes due or is paid if tax isn t charged, the purchaser must self-assess and remit the tax tax is due on the last day of the month following the month in which the transaction occurred PST registrants can self-assess and remit the tax on their PST return Bulletin PST 002 When to Charge and Collect PST 10

11 Real Property Contracts 11

12 Real Property Contracts PST doesn t apply to labour to install goods that become real property when installed, and services to real property. 12

13 Goods that become part of real property 13

14 Real Property Contractor You re a contractor if you supply and affix, or install, goods that become part of real property. Contractors pay PST because they are the user of the goods used to fulfil the contract (unless a specific exemption applies). Contractors pay PST regardless of the type of contract. Contractors don t charge their customers PST. They aren t eligible for the PST exemption for goods obtained for resale. Bulletin PST Real Property Contractors 14

15 Exception Rule & Exemptions Agreement by the Customer to Pay the PST contractors do not have to pay PST on goods they obtain to fulfil a contract only if they and they customer enter into an agreement that specifically states that the customer agrees to the contractor transferring the liability for the PST on the goods to them, and the agreement meets specific conditions Contracts with Persons Exempt from PST Government of Canada (unless the Government of Canada has agreed to pay PST), or one of the persons who would be exempt from PST if they had obtained the goods instead of the contractor 15

16 Contractor Common Mistakes registering to be a PST collector when they don t need to charging their customers PST when they shouldn t be not paying the PST when they buy their goods and supplies not keeping track of goods installed vs. goods sold 16

17 Exemptions & Refunds 17

18 Exemptions Exempt Goods food for human consumption, bicycles, residential energy specified safety equipment, medications, health related equipment Exempt Services automobile towing, cleaning services, personal services veterinary services, services to items that are exempt from tax Bulletin PST 200 PST Exemptions and Documentation Requirements 18

19 Refunds you can apply for a refund if you paid in error or overpaid you can refund or credit your customers within 180 days of the date the PST was paid after 180 days, a customer may apply to the ministry for a refund a refund claim must be received by the ministry within four years of the date the tax was paid or remitted the PST Bulletin PST 400 PST Refunds 19

20 Rulings, Audit & Appeals 20

21 Rulings and Interpretations anyone can request a ruling questions can be general or specific but must include all the facts an aid intended to help understand the legislation and regulations written confirmation of the ministry's position on application of tax rulings are not law CTBTaxQuestions@gov.bc.ca general questions - 2 to 3 business days turnaround specific questions 20 business days turnaround 21

22 Audits Taxpayers may be chosen for an audit based on a special audit project legislated program risk-based selection, or a referral from another audit businesses located outside of BC that conduct business in the Province can also be audited 22

23 What s the Auditor Looking For? charged the proper amount of tax on taxable sales kept track of the tax charged remitted money to the government on time documentation to support any tax-exempt sales documentation to support any tax adjustments made on tax returns paid or self-assessed tax as required Bulletin CTB Audits 23

24 How far back can you be audited? Generally, an audit covers up to a four-year period, depending on the tax type and the audit focus as follows: Provincial Sales Tax Tax not collected on sales Tax collected but not remitted Tax not paid on purchases 3 years 4 years 4 years There are no time limits for an audit if: wilfully don't pay or send in your taxes, or commit fraud. 24

25 Typical Audit Process Flowchart Initial Contact Review of Audit Assessment? Pre-Audit Discussion Concerns? Right to Appeal Examination of Records Audit Working Papers Appeal to the Court 25

26 Right to Appeal If you disagree with a decision made by the Ministry of Finance, you may have the right to formally appeal to the minister. If you disagree with the minister s decision, you have 90 days from the date of the minister s letter to further appeal to the courts. Bulletin Gen Appeals 26

27 Voluntary Disclosure If you identify that you haven t charged, remitted or paid PST as required, you must disclose the liability to the ministry and pay any overdue amounts, plus applicable interest. If you voluntarily disclose a tax liability to the ministry, you won t be subject to penalty or prosecution if specific conditions are met. CTB 005- Penalties and Interest 27

28 Understand Your Rights 28

29 Registration etaxbc & Filing Returns 29

30 Registration gov.bc.ca/pst Bulletin PST Registering to Collect PST 30

31 etaxbc 24/7 access gov.bc.ca/etaxbc/myaccount 31

32 Resources Ministry of Finance s website Legislation Provincial Sales Tax Act Provincial Sales Tax Regulation Provincial Sales Tax Exemption and Refund Regulation Publications Guides, Bulletins, Notices, Forms, Videos Subscribe to the What s New service 32

33 Contact Information Taxpayer Services: Toll free # Website: gov.bc.ca/pst Through your etaxbc account 33

34 Questions This information is provided as an aid to understanding the legislation and is not intended to replace the legislation. 34

35 35