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BC delays planned carbon tax & PST changes to 2021

BC delays planned carbon tax & PST changes to 2021

Province will delay carbon tax increases and new sales tax measures to April 1, 2021

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British Columbia announced it will delay tax measures to expand registration requirements and eliminate the PST exemption for certain carbonated beverages to April 1, 2021. Also, the province will further delay planned carbon tax increases to April 1, 2021 (from October 1, 2020). These measures were originally announced in the province's 2020 provincial budget.

In addition, British Columbia has also extended the time limit for certain taxpayers to claim a refund of carbon tax, motor fuel tax, PST and tobacco tax.

Background

British Columbia proposed several new indirect tax measures in its 2020 provincial budget. These measures:

  • Expand PST registration requirements for Canadian sellers of goods, along with Canadian and foreign sellers of software and telecommunication services, where specified B.C. revenues exceed $10,000
  • Eliminate the PST exemption for carbonated beverages that contain sugar, natural sweeteners or artificial sweeteners
  • Adjust carbon tax rates to align with the federal carbon pricing backstop methodology

The province later announced it would delay these budget proposals as part of its COVID-19 response plan. These measures were later included in Bill 4, which indicated that the PST registration requirements and PST for carbonated beverages would be effective on a date to be set by regulation, while the carbon tax rate increases were effectively delayed to October 1, 2020 (from April 1, 2020) by a particular remission regulation.

PST changes delayed

British Columbia announced that it will postpone the implementation of the expanded PST registration requirements and the planned elimination of the PST exemption for certain carbonated beverages to April 1, 2021.

Carbon tax increase delayed

British Columbia announced that it will also further delay the carbon tax rate changes to April 1, 2021 and April 1, 2022 (from October 1, 2020 and April 1, 2021, respectively, but originally scheduled for April 1, 2020 and April 1, 2021). As a result, carbon tax rates will remain at their current levels until March 31, 2021.

Extended Time Limit for Claiming a Refund

British Columbia will provide an additional 90 days after the end of the provincial state of emergency to submit a refund claim of carbon tax, motor fuel tax, PST or tobacco tax, where the four-year deadline to submit a refund claim expires during the provincial state of emergency (originally declared on March 18, 2020).

For more information, contact your KPMG advisor.

Information is current to September 15, 2020. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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