BC PST on Software

In British Columbia, accounting services are subject to GST (5%), not to PST (7%). However, interpretations are required for cloud services providing access to their customers. In accordance with BC Provincial Sales Tax Act, Bulletin PST 105 indicates that if a customer purchases a right to access software and the functions go beyond viewing content, i.e. the customer can use it to manipulate files or create new files, the PST applies.

A good example is a service provider entering into an agreement to manage payroll processing. If the agreement provides the customer with the right to complete particular tasks such as creating new employees’ files, the customer will be subject to PST. If the customer logs in only to view his company payroll and his employees connect to view their pay stubs, the PST will not apply.

The same way, if a service provider gives access to an accounting software and the customer only view available reports and financial statements without manipulating any data, the PST does not apply; if the customer enter data, such as creating invoices, the PST will apply.

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