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A quick question to sole proprietors - if I provide software development services, do I need to charge Provincial Sales Tax (PST) on them (living in BC, companies that I work for are in BC as well).

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  • Although there's a helpful looking answer below, a broader version of this question that addresses the issue in a range of jurisdictions might be of interest. For example, I know that in my state consulting services require payment of "sales tax" (it's actually a gross receipts tax.) This has surprised some of my friends starting up as 1099 consultants who weren't aware of the tax.
    – Brian Borchers
    Commented Jan 18 at 20:11

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I used to develop custom software for many companies in BC and never charged PST.

In general you must charge PST if you sell software that you own. However there are a few exemptions.

If you develop custom software for individual companies for their exclusive use (and do not resell the software to others) that is exempt.

From https://www2.gov.bc.ca/assets/gov/taxes/sales-taxes/publications/pst-105-software.pdf

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You still have to charge GST as you are providing software development services.

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  • Thanks, really appreciate the help!
    – m.aibin
    Commented Jan 22 at 21:37
  • Did you still report quarterly even you didn't charge PST?
    – m.aibin
    Commented Jan 22 at 22:27
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    I never registered for PST so no. I did collect and report GST however.
    – DJ.
    Commented Jan 22 at 23:23

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