British Columbia PST Expansion 2026: Tax on Professional Services

Businesses in British Columbia, Canada, will face new compliance requirements and additional unrecoverable provincial sales tax (PST) costs on certain professional services starting from October 1, 2026. Under the 2026 provincial budget, the PST has been extended to cover accounting, architectural, engineering, and geoscience services, security services, and various non-residential real estate services.

Overview of New PST Rules

Under the new rules, the definition of accounting services subject to PST has been broadened to include the preparation of accounting records, providing assurance services, including auditing or reviewing accounting records and accounting controls, bookkeeping, and billing. Regarding the prescribed services, they will be subject to PST, as with other professional services.

Also, British Columbia extended the PST application to engineering, including geoscience, services, and architectural services. Moreover, to determine which services fall under PST, vendors need to review related definitions in other provincial regulations. In contrast to accounting services, where the list of services is non-exclusive, the lists of engineering and geoscience services subject to PST are detailed and quite extensive.

Concerning architectural services, they include advice or services within the practice of architecture provided by individuals who are registered, or required to be registered, under the Professional Governance Act, as well as any additional prescribed services that may be defined later. The new rules state that those who purchase these services will have to pay 7% PST on 30% of the purchase price of newly taxable engineering and architectural services. 

Non-residential real estate services connected to property located in the province are also subject to PST. As a result, 7% PST will apply to a wide range of services related to the sale or lease of commercial property when they are provided by individuals or businesses licensed under the Real Estate Services Act, or under comparable legislation in other jurisdictions.

Conclusion

Both vendors and purchasers will need to assess their specific circumstances to determine whether new registration, reporting, and compliance obligations apply. Businesses that acquire these newly taxable professional services should also evaluate how the additional PST costs could impact their budgets and overall project expenses. Notably, the provincial government is expected to publish additional guidelines in the months leading up to October to provide more details on the new PST requirements.

Source: KPMG