GST and PST for BC Small Businesses: When and How to Charge

Figuring out GST and PST for small business BC owners is genuinely confusing, because you're dealing with two governments, two registrations, and two completely different rulebooks. Get it wrong and the CRA or the BC Ministry of Finance can assess tax you never collected - straight out of your own pocket. This guide gives Kelowna and Okanagan founders the combined picture: when each tax kicks in, how to register, and how to charge, file, and remit without penalties.

GST vs PST in BC: Two Different Taxes, Two Different Rulebooks

British Columbia never adopted HST, so you deal with two separate taxes:

• GST - 5%, federal. Administered by the CRA. Applies to most goods and services across Canada.
• PST - 7%, provincial. Administered by the BC Ministry of Finance. Applies to taxable goods, software, and a specific list of taxable services sold in BC.

On most taxable goods sold in BC, your customer pays 12% total (5% GST + 7% PST). But the two taxes are structurally different, and it matters for your bottom line:

The practical takeaway: GST is money you collect and pass along, minus what you paid on your own inputs. PST you pay on business purchases is simply gone: there's no PST equivalent of an input tax credit, except for goods you buy for resale, which are exempt when you give your PST number to the supplier.

The $30,000 Small Supplier Rule: When GST Registration Becomes Mandatory

The small supplier rule is the most misunderstood threshold in Canadian small business tax, so let's be precise: you must register for GST once your worldwide taxable revenue exceeds $30,000 over four consecutive calendar quarters. That's a rolling test, not a calendar-year test. And if a single quarter alone exceeds $30,000, you must register immediately.

Three things founders consistently get wrong:

1. It's gross revenue, not profit. The GST threshold in Canada is $30,000 of taxable sales before any expenses.
2. It's a rolling four quarters, not "per year." Q3 + Q4 of last year plus Q1 + Q2 of this year counts.
3. The clock starts at the sale that crosses the line. You're a registrant from that sale, and must register within 29 days of it.

Ignore the rule and the CRA can backdate your registration and assess GST on every taxable sale since the effective date, including sales where you never charged a cent of GST. That 5% comes out of your pocket, plus penalties and interest. Already over the line? The Voluntary Disclosures Program can waive penalties if you come forward first. The threshold hasn't moved since 1991, so more Okanagan side hustles cross it every year than their owners expect.

This applies to sole proprietors and freelancers in Canada exactly the same as corporations. If you're still deciding on structure, our guide to sole proprietorship vs incorporation in Canada walks through the trade-offs.

Why Registering for GST Early Can Actually Save You Money

Most guides treat GST registration for a small business as a burden to delay. For many Kelowna founders, that's backwards. Three reasons to register voluntarily early:

• Input tax credits on startup costs. Once registered, you recover the GST you pay on laptops, software subscriptions, legal fees, contractor invoices, and equipment. In year one, when spending outpaces revenue, that often means a net GST refund.
• Signalling. Business clients know the rules. An invoice with no GST number quietly announces you bill under $30,000 a year. A GST number reads as established.
• The Quick Method. Businesses with annual taxable sales of $400,000 or less can elect the CRA's Quick Method: still charge 5%, but remit only 3.6% of GST-included sales for service businesses (1.8% for retailers and wholesalers) in BC, plus a 1% credit on your first $30,000 of supplies each year. You keep the spread in exchange for giving up most ITCs - usually a win for low-expense service businesses. (Accountants, lawyers, and financial consultants aren't eligible.)

The catch to voluntary registration: you now charge 5% to everyone. If your customers are consumers rather than businesses, that's a price increase they can't recover, so weigh who your buyers are first.

PST in BC: Who Has to Register and What's Taxable

PST plays by completely different rules, and this is where national tax guides leave BC founders stranded.

There is no $30,000-style threshold for PST. If your business is located in BC and sells or leases taxable goods, software, or taxable services, you must register to collect PST before making your first taxable sale. Day one, dollar one.

The only out is the narrow small seller exemption: no established business premises (a home-based workshop counts) and gross taxable sales of $10,000 or less over 12 months. Small sellers pay PST on their inventory instead of collecting it. Most real businesses don't qualify.

Do I need to charge PST in BC on services?

Today, most services are still PST-exempt in BC - consulting, design, writing, software development, and marketing services carry no PST. But some services have always been taxable:

• Legal services
• Software and SaaS (yes, BC taxes SaaS)
• Telecom services
• Accommodation (at 8%)
• "Related services" - repairs and maintenance of goods, like auto repair or computer repair

The big 2026 change: under BC's Notice 2026-001, effective October 1, 2026, PST at 7% extends to accounting, bookkeeping and assurance, architectural, engineering and geoscience, security and private investigation, and non-residential real estate services (commercial trading, rental and strata management). Architectural, engineering, and geoscience services are taxed on only 30% of the purchase price - roughly 2.1% effective. Registration opened April 1, 2026, and you must charge PST from October 1 onward. That's months away. If this is your field, register now.

Key PST exemptions in BC

The PST exemptions list is long, but the ones small businesses hit most: basic groceries and restaurant food, most services (until the expansion above), children's clothing, bicycles, books, and goods purchased for resale with your PST number.

Selling into BC from elsewhere? Out-of-province sellers must register once they hit $10,000 of BC sales in 12 months, and storing inventory in BC means registering before your first sale.

How to Register for GST and PST as a BC Small Business (Step by Step)

Both registrations are free and fast. Register your business itself first - see our guide on how to register a business in BC ($40 for a sole proprietorship, $351.50 to incorporate).

Registering for GST (how to get a GST number)

1. Go to the CRA's Business Registration Online, the fastest route, issuing your Business Number and GST/HST account in minutes.
2. Have ready: your SIN (sole props register under their SIN), business name and address, structure, major business activity, effective registration date, expected revenue, fiscal year-end, and preferred reporting period.
3. You'll receive a number in the format 123456789 RT0001. Save or print it immediately - it is not mailed to you.
4. Prefer humans? Call the CRA business line at 1-800-959-5525, or mail form RC1.

That same Business Number later links your payroll and corporate tax accounts - one number, multiple program accounts.

Registering for PST in BC

1. Go to eTaxBC via the BC government PST pages. Online registration takes roughly 15-25 minutes and is available 24/7.
2. Alternatives: in person at any Service BC centre, or by mail/fax with form FIN 418.
3. You'll get a PST number in the format PST-1234-5678. Keep your eTaxBC login; it's also where you'll file.

Charging, Collecting, and Invoicing GST and PST in BC Correctly

Once registered, mechanics matter. Here's how to charge GST and PST in BC without creating problems for yourself or your customers.

Show each tax as its own line item, both calculated on the pre-tax price. There's no tax-on-tax in BC. A $1,000 sale of taxable goods looks like:

• Subtotal: $1,000.00
• GST (5%): $50.00
• PST (7%): $70.00
• Total: $1,120.00

The CRA also sets minimum invoice requirements, tiered by sale size:

• Under $100: your business name, invoice date, total amount.
• $100 to under $500: add your GST number and the tax amount (or a "GST included" note).
• $500 and up: add the buyer's name, a description of the goods or services, and payment terms.

If your GST number isn't on the invoice, your business customers cannot claim their input tax credits, and they will email you about it. Put it in your invoice template once and forget it.

Charge based on your customer's location, not yours; the special cases section below covers selling beyond BC.

Filing and Remitting: Deadlines, Methods, and Penalties

Collecting the tax is half the job. Remitting it on time is the other half, and this is where penalties live.

Filing your GST return in Canada

The CRA assigns your reporting period by revenue: annual by default under $1.5M, quarterly from $1.5M-$6M, monthly above $6M (you can elect more frequent, never less). Monthly and quarterly filers file and pay one month after the period ends; annual filers file three months after fiscal year-end. Sole proprietors with a December 31 year-end file by June 15, but payment is due April 30, a classic first-year trap.

Electronic filing has been mandatory since 2024 ($100 penalty for the first paper return, $250 after). File late with a balance owing and you're hit with 1% of the balance plus 0.25% per month for up to 12 months, plus interest at the prescribed rate (7% compounded daily in early 2026).

Filing PST through eTaxBC

PST returns are due the last day of the month after your reporting period, filed through eTaxBC. Your frequency depends on how much PST you collect annually: over $12,000 means monthly; $6,001-$12,000 monthly or quarterly; $3,001-$6,000 quarterly or semi-annual; $3,000 or less can file as rarely as annually.

Here's the part almost nobody mentions: BC pays you a commission of up to $198 per reporting period for collecting and remitting on time; file late and you forfeit it. Meanwhile, failing to charge or collect PST can trigger an assessment of 100% of the uncollected tax plus a discretionary 10% penalty, with interest compounded monthly.

Special Cases: Online Sales, Services, and Selling Outside BC

Selling to other provinces. One GST/HST registration covers all of Canada, but you charge the destination's rate: 5% GST for BC, Alberta, Saskatchewan, Manitoba, Quebec (federal portion), and the territories; 13% HST for Ontario; 14% for Nova Scotia; 15% for New Brunswick, PEI, and Newfoundland. Goods take the rate where delivered; services generally take the customer's address.

BC PST stops at the border. You don't charge BC PST on goods shipped outside BC. But Saskatchewan (6% PST), Manitoba (7% RST), and Quebec (9.975% QST) have their own registration thresholds if you sell heavily into them.

Exports outside Canada are zero-rated. Charge 0% GST and still claim your ITCs, a genuinely good deal for Okanagan businesses selling to US customers.

Online and digital businesses. BC applies PST to software, SaaS, and digital goods sold to BC customers, one of only a few provinces that does. Marketplace facilitators like Amazon and Etsy generally collect BC PST on facilitated sales, but confirm per platform rather than assuming.

If tax registration is on your to-do list, you're probably juggling a dozen other setup tasks. Our guide on how to start a business in Kelowna puts them in order.

Key takeaways

• BC has no HST: 5% GST (CRA) plus 7% PST (BC Ministry of Finance), each with its own registration, return, and rules.
• The $30,000 GST threshold is gross revenue over four rolling quarters; register within 29 days of crossing it, or the CRA can backdate and assess GST you never collected.
• Registering for GST early often pays: ITCs on startup costs, credibility with clients, and the Quick Method for service businesses under $400,000.
• PST has no revenue threshold: BC businesses selling taxable goods, software, or taxable services register before their first sale.
• October 1, 2026: PST expands to accounting, architecture, engineering, security, and commercial real estate services. Affected providers should register now.
• Invoice with GST and PST as separate line items on the pre-tax price, GST number shown on anything over $100.
• File on time: BC pays up to $198 per period to punctual PST filers; the CRA charges escalating penalties for late GST.

Frequently asked questions

Do I need to charge PST in BC on services?

Mostly no: consulting, design, marketing, and software development services remain PST-exempt. Exceptions include legal services, software/SaaS, telecom, accommodation, and repairs. From October 1, 2026, accounting, architectural, engineering, security, and non-residential real estate services become taxable too.

What happens if I don't register for GST after $30,000?

The CRA can backdate your registration to the sale that crossed the threshold and assess GST on every taxable sale since - money you never collected, paid from your own pocket, plus penalties and interest. The Voluntary Disclosures Program can waive penalties if you come forward before they contact you.

Is the $30,000 GST threshold before or after expenses?

Before. It's gross taxable revenue, not profit. A sole proprietor billing $32,000 with $25,000 in expenses has crossed the threshold, even though they only netted $7,000.

Do freelancers and sole proprietors need a GST number in Canada?

Yes - the same $30,000 small supplier rule applies regardless of structure. Sole proprietors register with their SIN to get a Business Number. Below $30,000, registration is optional but often worthwhile for the input tax credits.

How much does it cost to register for GST and PST?

Nothing. Both registrations are free. GST takes minutes through CRA Business Registration Online; PST takes about 15-25 minutes through eTaxBC.

Do I charge BC PST to customers in other provinces?

No. BC PST doesn't apply to goods shipped outside BC. You still charge GST or HST at your customer's provincial rate, and heavy sales into Saskatchewan, Manitoba, or Quebec can trigger their separate provincial registrations.

Does BC PST apply to SaaS and online sales?

Yes. BC taxes software, SaaS, and digital goods sold to BC customers at 7%. Marketplaces like Amazon and Etsy generally collect it for facilitated sales, but verify your platform's setup.

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Sales tax gets dramatically easier when you can ask someone who filed their first GST return last quarter. Join the Kelowna Founders Club free to compare notes with Okanagan founders who've been through it, and come to one of our upcoming events to ask your questions in person.