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Update: July 31, 2026
Corporate Tax
Prepared by
Veles Consulting team
Veles Consulting team
A straightforward explanation of the new tax, with calculations and examples, so you can clearly understand what will change on your invoices.
PST on Professional Services in BC:
What Businesses Need to Know Before October 1, 2026
What Businesses Need to Know Before October 1, 2026
Is PST being extended to professional services, including accounting?
What changed and why
Short answer: yes.
Long answer: this article explains the changes in plain language and with concrete examples, just as we do for our clients every day.
Long answer: this article explains the changes in plain language and with concrete examples, just as we do for our clients every day.
The 2026 British Columbia Budget announced an expansion of the Provincial Sales Tax (PST) base to include a range of professional services. This was formalized in Bill 2 (Budget Measures Implementation Act, 2026), and administrative guidance was issued by the province in Notice 2026-001.
Starting on October 1, 2026, PST at a rate of 7% will apply to several services that were previously exempt, including:
Important: while the budget was presented in February and the notice was issued in February–March, final details on some service categories and exemptions are still being clarified. Always verify the latest information on the official BC government website before making decisions.
Starting on October 1, 2026, PST at a rate of 7% will apply to several services that were previously exempt, including:
- Accounting services.
- Architectural services.
- Engineering and geoscience services.
- Security services.
- Services related to commercial real estate.
Important: while the budget was presented in February and the notice was issued in February–March, final details on some service categories and exemptions are still being clarified. Always verify the latest information on the official BC government website before making decisions.
Service type
Accounting services
100% of the service value
Bookkeeping, auditing, financial reporting, tax calculations, reconciliations, and most other accounting work. PST is 7% of the full service amount.
PST is charged only on 30% of the invoice amount.
The same 30% rule applies here.
Includes realtor commissions for non-residential properties, property management, and strata management.
Includes security companies and private investigators.
100% of the service value
100% of the service value
30% of the service value
30% of the service value
Architectural services
Engineering and geoscience services
Services related to commercial real estate
Security services
PST base
Practical implication
Example 1: How PST is calculated for architects and engineers.
Example 2: Mixed services in one project.
Why the invoice date alone is not enough.
What if the supplier forgets to charge PST?
Services from other provinces.
PST and GST/HST.
How this will affect businesses.
What to do now.
What this means.
How we can help.
For Veles Consulting clients.
Additional information:
Many companies assume: “If I issue the invoice before October 1, there will be no tax.” That is not always correct. What matters is not only the invoice date, but also when the service is actually rendered and which period the payment covers.
BC has a self-assessment mechanism: if a supplier mistakenly omits PST from an invoice, the purchaser may be required to self-calculate and remit the tax. The supplier also remains liable; if the error is discovered during an audit, both parties may face questions.
A similar logic applies when you purchase services from a company in another province: if the service relates to your operations in BC, PST may still be your responsibility, even if the supplier is not registered for PST in BC.
If you are used to working with GST/HST, you are likely familiar with input tax credits that allow you to recover tax paid. With PST in BC, this generally does not apply: in most cases, the tax cannot be claimed back and remains a direct expense.
That means 7%, (except for architectural and engineering services), is a real additional cost, not a temporary timing difference.
For small businesses, this matters: build these amounts into your budget in advance rather than treating them as a surprise expense later.
That means 7%, (except for architectural and engineering services), is a real additional cost, not a temporary timing difference.
For small businesses, this matters: build these amounts into your budget in advance rather than treating them as a surprise expense later.
For purchasers, a 7% increase in service costs, (except for architectural and engineering services), translates into direct expenses with no recovery option. This can be especially significant for smaller firms where every cost line matters.
For suppliers, new obligations will include tax calculation, invoice template updates, accounting system changes, and staff training.
We strongly advise small businesses to factor this cost increase into their budgets now, rather than leaving it as a year-end surprise.
For suppliers, new obligations will include tax calculation, invoice template updates, accounting system changes, and staff training.
We strongly advise small businesses to factor this cost increase into their budgets now, rather than leaving it as a year-end surprise.
Final clarifications on some details, including exemptions, exceptions, and administration, are still being clarified and are expected by late summer 2026. However, this is not a reason to delay preparation, because the core rules are already known.
Starting October 1, 2026, PST will become a new expense item for many businesses that purchase accounting, engineering, architectural, security, or commercial real estate services in BC.
Our advice: do not wait until October. Review contracts, budgets, and invoicing systems now, ideally with your accountant or tax advisor. Businesses that prepare in advance will enter fall 2026 without unpleasant surprises.
Our advice: do not wait until October. Review contracts, budgets, and invoicing systems now, ideally with your accountant or tax advisor. Businesses that prepare in advance will enter fall 2026 without unpleasant surprises.
The Veles Consulting team can help your business prepare for these changes:
- Determine whether your business needs to register for PST and assist with error-free registration.
- Analyze your current contracts and service agreements to identify where and when the tax will apply.
- Configure or review invoice templates and accounting systems to ensure the tax is calculated automatically and accurately.
- Help forecast how the changes will affect your company’s budget for the second half of 2026 and for 2027.
Some services provided on or after October 1, 2026, may also be subject to the provincial sales tax (PST). We will provide additional information on how this change will affect our services, invoices, and billing processes as the effective date approaches.
If you have questions about how these PST changes specifically affect your business, contact our team. We will help you navigate the changes with minimal stress.
If you have questions about how these PST changes specifically affect your business, contact our team. We will help you navigate the changes with minimal stress.
This material is based on official guidance from the Government of BC (Notice 2026-001) and the text of Bill 2 (Budget Measures Implementation Act, 2026). Some details, including exemptions, exceptions, and administration, are still being clarified and are expected by late summer 2026. We recommend checking the official provincial website before making any decisions.
Sources for independent verification:
Sources for independent verification:
For accounting, security, and real estate services, there is no reduced base: PST is calculated on the full invoice amount.
This is a common situation for small businesses: one contract may include several types of work. Suppose a company signs a contract for CAD 10,000:
PST calculation:
Total PST: CAD 406.
Conclusion: when a project includes mixed services, the costs should be separated by category and taxed accordingly. This is important for accurate invoicing and for compliance during audits.
- CAD 6,000 — architectural work, subject to the 30% rule.
- CAD 4,000 — related services with no reduced base, taxed in full.
PST calculation:
- Architectural portion: 30% x 6,000 = CAD 1,800; 7% x 1,800 = CAD 126.
- Other services: 7% x 4,000 = CAD 280.
Total PST: CAD 406.
Conclusion: when a project includes mixed services, the costs should be separated by category and taxed accordingly. This is important for accurate invoicing and for compliance during audits.
Let's do the math
An engineering firm bills a client CAD 10,000 for design work.
The tax isn't calculated on the full amount — only on 30% of the fee: 30% × CAD 10,000 = CAD 3,000.
PST at 7% applies to that CAD 3,000: 7% × CAD 3,000 = CAD 210.
The client pays an extra CAD 210 — that works out to about 2.1% of the total invoice, not the full 7% you might expect.
An engineering firm bills a client CAD 10,000 for design work.
The tax isn't calculated on the full amount — only on 30% of the fee: 30% × CAD 10,000 = CAD 3,000.
PST at 7% applies to that CAD 3,000: 7% × CAD 3,000 = CAD 210.
The client pays an extra CAD 210 — that works out to about 2.1% of the total invoice, not the full 7% you might expect.
Example 3: Long-term contract
An accounting firm signs a one-year service agreement with a client from August 1, 2026, to July 31, 2027, with monthly payments of CAD 2,000.
The contract is signed well before October 1, 2026, so it may seem safe. However, services provided starting in October 2026, meaning invoices for October, November, and later, will likely be subject to PST because the services are rendered after the effective date.
Bottom line: focus on the period the invoice covers, not just the contract signing date.
An accounting firm signs a one-year service agreement with a client from August 1, 2026, to July 31, 2027, with monthly payments of CAD 2,000.
The contract is signed well before October 1, 2026, so it may seem safe. However, services provided starting in October 2026, meaning invoices for October, November, and later, will likely be subject to PST because the services are rendered after the effective date.
Bottom line: focus on the period the invoice covers, not just the contract signing date.
Example 5: Supplier error, but you may still need to pay
A company orders property management services and receives an invoice for CAD 5,000 in November 2026. The supplier did not include PST. The purchaser may need to self-assess 7% x 5,000 = CAD 350 and remit it to the tax authority.
Tip: discuss this point with contractors upfront and specify in the contract which party is responsible for PST calculation
A company orders property management services and receives an invoice for CAD 5,000 in November 2026. The supplier did not include PST. The purchaser may need to self-assess 7% x 5,000 = CAD 350 and remit it to the tax authority.
Tip: discuss this point with contractors upfront and specify in the contract which party is responsible for PST calculation
If you purchase these services
- Review your budget for the second half of 2026 and for 2027. Has the 7% cost increase, or about 2.1% for architectural and engineering services, been accounted for?
- Check long-term contracts and recurring payments. Do any service periods cross the October 1, 2026 threshold?
- Remember: PST generally cannot be recovered, so treat it as a permanent expense increase, not a timing difference.
- If a supplier forgets to charge the tax, be prepared to self-assess and pay it. It is better to clarify this in advance than to discover it during an audit.
If you provide these services
- Check whether you need to register for PST. You may be able to do this several months before October 1, 2026.
- Update your invoice templates so the tax appears as a separate line and is calculated correctly, including the 30% rule for architects and engineers.
- Verify your accounting software configuration: does it automatically apply the new rate from the correct date?
- Review long-term contracts and service subscriptions. Decide in advance how you will invoice for periods that cross October 1, 2026.
Example 6
A company based and operating in BC purchases accounting services from an Alberta-based firm on November 5, 2026, for use in its BC operations. The Alberta firm is not registered and does not charge PST.
The BC-based company must self-assess and remit PST because it is a BC resident acquiring services related to its activities in the province.
A company based and operating in BC purchases accounting services from an Alberta-based firm on November 5, 2026, for use in its BC operations. The Alberta firm is not registered and does not charge PST.
The BC-based company must self-assess and remit PST because it is a BC resident acquiring services related to its activities in the province.
Example 4: How to invoice by service period
Confusion often arises when the invoice date and the service period do not match. Here are two typical scenarios and how to handle each:
Practical tip: if a service spans different periods, for example from September 25 to October 5, it is best to split the invoice into two parts: one for the days before October 1, with no PST, and one for the days after, with PST.
Confusion often arises when the invoice date and the service period do not match. Here are two typical scenarios and how to handle each:
- Invoice dated October 1 as a prepayment for October. The service will be rendered in October, after October 1, so PST must be charged. The tax should be shown separately on the invoice, even if payment is received in advance.
- Invoice dated October 1 as a post-payment for September. If the service was fully rendered before October 1, PST does not apply. The invoice date is secondary; what matters is that the service was completed before the new rules took effect.
Practical tip: if a service spans different periods, for example from September 25 to October 5, it is best to split the invoice into two parts: one for the days before October 1, with no PST, and one for the days after, with PST.