Tax Verification Frequently Asked Questions (FAQ)

Tax Verification Letter FAQs

The following are frequently asked questions related to Tax Verification Letters and processes:

1.    What is the purpose of this new procurement policy? 

The purpose of this procurement policy is to ensure businesses and individuals doing business with the Province are compliant with certain provincial tax obligations before entering into provincial contracts valued at or above $100,000 (including all fees, expenses and all options to extend or renew).

2.    When does the tax verification confirmation process come into effect?

Unless an exception applies, the Tax Verification Letter requirement will be required before entering into a contract  on or after January 1, 2020.  

3.    Which vendors are required to obtain the Tax Verification Letter?

All vendors entering into a contract with the Province valued at or above $100,000 (including all fees, expenses and all options to extend or renew) are required to obtain a Tax Verification Letter, unless an exception applies. This Tax Verification Letter requirement also applies when an applicable contract is extended or renewed. This includes vendors such as:

  • consulting, management or financial services companies,
  • companies that don’t sell or lease taxable goods or provide software or taxable services,
  • not-for-profit organizations,
  • Indigenous organizations,
  • out-of-province, foreign or international entities, and
  • public sector organizations.

4.    What are the exceptions to the requirement to obtain a Tax Verification Letter?

A Tax Verification Letter will not be required where: 

  • the Contract value, including all  fees, expenses and all options to extend or renew, is less than $100,000 ,
  • the Contract is being entered into in response to an unforeseen emergency, or 
  • only one vendor is qualified to provide the goods, services or construction.

The policy does not apply to government transfer payments as described in Chapter 21 of the Province’s Core Policy and Procedures Manual (i.e., grants, entitlements and shared cost arrangements).

5.    When should a Tax Verification Letter be requested? 

A Tax Verification Letter may be requested by a vendor from Ministry of Finance at any time but must be provided to the purchasing ministry prior to the contract being signed. Therefore, vendors that are participating in a competitive procurement that may result in a contract subject to the Tax Verification Letter requirement should request a Tax Verification Letter as early as possible in the process to avoid a delay when contract finalization or the issuance of a purchase order may be taking place. 

6.    How can vendors obtain a Tax Verification Letter? 

The quickest and easiest way for vendors to obtain a Tax Verification Letter is to apply via eTaxBC at: https://www.etax.gov.bc.ca/btp/eservices.  Refer to the Vendor Information: Tax Verification Letter page for more information.

7.    How much does it cost vendors to apply for the Tax Verification Letter?

There is no cost to apply for a Tax Verification Letter.

8.    When will vendors receive their Tax Verification Letter?

In most cases, the Tax Verification Letter will auto-generate in the eTaxBC system within 24 hours of requesting it via the online application.  

9.    How long are Tax Verification Letters valid? 

A Tax Verification Letter is valid for one year from the date the letter is issued. 

10.    Can a Tax Verification Letter be used on multiple contracts? 

Yes, the same Tax Verification Letter can be used for multiple contracts. 

11.    What if the vendor does not receive their Tax Verification Letter after 24 hours of applying online? 

The vendor can contact the Ministry of Finance at: 1-877-387-3332 (Toll free) or at 250 387-3332 (Victoria) or by email at ITBTaxQuestions@gov.bc.ca to find out the status of their Tax Verification Letter.

12.    Do all vendors need to apply for the Tax Verification Letter?

All vendors entering into a contract with the Province valued, at or above $100,000 (including all fees, expenses and all options to extend or renew) are required to obtain a Tax Verification Letter, unless an exception applies. This Tax Verification Letter requirement also applies when an applicable contract is extended or renewed. This includes vendors such as:

  • consulting, management or financial services companies,
  • companies that don’t sell or lease taxable goods or provide software or taxable services,
  • not-for-profit organizations,
  • Indigenous organizations,
  • out-of-province, foreign or international entities, and
  • public sector organizations.

13.    What does a Tax Verification Letter verify?

The Tax Verification Letter verifies that a vendor is up-to-date on their B.C. corporate income tax and provincial sales tax (PST) filings and that no balance is owing on their PST account, except in the limited circumstances listed below.

14.    If a vendor has a matter under appeal with the B.C. Ministry of Finance, will they receive a Tax Verification Letter?

Vendors with a PST matter under appeal will still receive a Tax Verification Letter as long as all B.C. corporate income tax and PST filings are current, and any PST balance owing is related to the matter under appeal.

15.    If a vendor has an outstanding PST balance and has a entered into a payment arrangement with the B.C. Ministry of Finance, will they be able to receive a Tax Verification Letter?

Provided the vendor has entered into an acceptable payment arrangement to pay the PST balance with the B.C. Ministry of Finance and corporate income tax and PST filings are current, a Tax Verification Letter will be issued.

16.    If a vendor owes money to the Canada Revenue Agency and does not have a collection plan in place, will they be able to receive a Tax Verification Letter? 

For the purposes of the Tax Verification Letter, the B.C. Ministry of Finance will confirm a vendor’s corporate income tax filings are current.   Corporate income tax balance is not considered at this time.

17.    If a vendor owes money to the B.C. Ministry of Finance and does not have a payment plan in place, will they be able to receive a Tax Verification Letter?

No, a Tax Verification Letter will not be issued to a vendor with an outstanding provincial sales tax balance, unless there is an acceptable payment plan in place or the PST balance relates to a matter under appeal and all B.C. corporate income tax and PST filings are current. Please refer any vendor in this situation to the B.C. Ministry of Finance at: 1-877-387-3332 to discuss entering into a payment arrangement.  

18.    Does the tax verification process review all government accounts, such as Property Transfer Tax or ICBC debt?

Only provincial sales tax filing and balance and provincial corporate income tax filing are covered under the tax verification process. More provincial tax accounts, such as employer health tax, may be added at a later time.  

19.    Is an  entity that does not have a tax obligation required to obtain a Tax Verification Letter?

Yes, all vendors being awarded a contract with the Province valued, including all fees, expenses and options to extend or renew, at $100,000 or more, regardless of whether they pay or collect tax, are required to obtain a Tax Verification Letter.  Entities that do not have a tax obligation will be issued a Tax Verification Letter.

20.    What happens for vendors who do not have access to the internet?  Can they complete a paper application form?

A paper application form is available for those who are not able to access the online application.  Paper forms take longer to process as they need to be manually entered into the application system and may take up to 4 weeks, to account for mail delivery time.

 
Vendors can get a paper application form by contacting the B.C. Ministry of Finance at: 
1 877-387-3332 (toll free)
250 387-3332 (Victoria)
ITBTaxQuestions@gov.bc.ca

21.    Where would a vendor mail their paper application form?

Completed paper application forms are to be sent to: 

Income Taxation Branch
Ministry of Finance
PO Box 9444 Stn Prov Govt
Victoria  B.C.  V8W 9W8


22.    Can vendors fax or email their application forms?

No.  If a vendor cannot complete the online application form, original paper application forms are required to be sent via mail. 

23.    Who should a vendor contact for help to complete the Tax Verification Letter application form? 

Vendors should contact the B.C. Ministry of Finance at: 1-877-387-3332 (Toll free) or at 250 387-3332 (Victoria) or by email at ITBTaxQuestions@gov.bc.ca

24.    How will vendors know if their online application form was submitted? 

A confirmation will be available in vendors’ eTaxBC online account once the application form has been submitted.

25.    What should a vendor do if they need to change their online application?

Vendors should contact the B.C. Ministry of Finance toll-free at 1-877-387-3332 or at 250 -387-3332 (Victoria) or by email at ITBTaxQuestions@gov.bc.ca to make the correction.  They can update the application for the vendor.  

26.    What process should ministries follow for Tax Verification Letters? 

Unless an exception applies, a ministry may not sign, extend or renew a contract without receiving a valid Tax Verification Letter.

Ministries running competitive procurements that relate to contracts subject to the Tax Verification Letter requirement  need to:

  • alert vendors with appropriate language in a given procurement document that a Tax Verification Letter will be required of the vendor as a condition of finalizing any contract that may be awarded or purchase order issued,
  • confirm that the Letter provided by the vendor is valid, and will be valid on the anticipated date of signing the contract, and 
  • Retain a copy of the letter in the contract file. Return the original to the vendor and keep the copy in the contract file.  

A Tax Verification Schedule will also need to be attached to all applicable contracts. If the contract is to be extended or renewed, the Tax Verification Schedule will require the vendor to provide a valid Tax Verification Letter to the purchasing ministry before the contract is extended or renewed.  Ministries must either confirm that the original Tax Verification Letter is still valid  or, if the Letter has expired, request and obtain a new Tax Verification Letter before extending or renewing the contract.  

27.    What happens if the vendor has an outstanding tax issue?

A contract with the Province that may have been awarded through a competitive procurement will not be able to be finalized if the Tax Verification Letter cannot be produced in accordance with the process described in the competitive procurement.   

28.    What should ministries do if the vendor says that they do not have time to do this?

A vendors’ time is valuable and the process to obtain a Tax Verification Letter is designed to be as easy and as efficient as possible for vendors.  It is recommended that a vendor apply for a Tax Verification Letter as early as possible in an applicable procurement process to avoid any delay with signing a contract. 

29.    What happens if a vendor cannot produce a Tax Verification Letter?

If a Tax Verification Letter is required by a procurement process and a Tax Verification Letter cannot be produced by the vendor under the terms of the applicable procurement process, then the contract cannot be finalized and the Province will likely need to move on to the next qualified vendor, if any.