In this document you can find the information about PST (Provincial Sales Tax) concerning software. If software was purchased on a physical medium, then this document does not apply to it, as in this case PST is paid as material personal property (merchandise). To find out the rules for PST for software that is subject to taxes, please check PST Notice 2012-010.

Definition of Software

Under the "software" in relation of PST we understand either any software program, which can be supplied or accessed by any means or the right to do so. Such software, for example, can be gaming programs, applications ("apps"), operating systems, source and executable codes. Device, which is used by person for software exploiting is called electronic device. Software can be either remotely accessed by such device, (which can be smart phone, tablet pc, laptop etc.) or downloaded to it.

General Rules for Buying the Software

Any software purchased for personal or business purposes, if it is used with/on electronic device located within BC, is subject to PST. If software is used with/on electronic device by a person who is actual BC resident (or just owns a property in BC), then it is subject to PST not depending on where it was bought.

Buying Software for Business Purposes

The software bought for business use on or with electronic device in BC under the following conditions:

— The software that was bought in BC for business use within BC or outside of it.

— The software that was bought in any place of the world for business use purposes on any electronic device inside and outside of BC. In this situation PST is calculated according to the software usage within BC.

Detailed information on taxpayers obligations connected with software usage within BC taking into consideration these specific situations will be provided soon.

Exclusions

Exclusions that were made for some software in the previous PST will apply for the present PST. They will include, but not be limited to, the following exclusions:

— Software that is considered as custom or custom transformed;

— Software created for the purpose of its modification, procession, manufacturing or being part of some other software with the intention of retail sales.

Such additional services for software as its installation or modification are not subject to PST. Details about PST exclusions will be provided soon.

Procedure of Paying and Collecting PST

Generally, the person or company that sells software on the territory of BC is to charge the tax after the purchase of software that is subject to taxes. Although, if the seller is located outside of BC the buyer has the responsibility to pay PST. Same rule is applied for business purchasing the software for multijurisdictional purposes. Details about self-assess of PST will be available soon.