Tax Verification Letters
Effective January 1, 2020, unless certain exceptions apply, vendors will be required to provide a Tax Verification Letter before contracts with the Province valued at equal to or above $100,000 (including all fees, expenses and options to extend or renew) can be entered into, extended or renewed. This requirement will ensure vendors entering into contracts with the Province are compliant with certain tax obligations.
This ensures that awarding contracts for goods, services and construction is done in a fair manner and demonstrates good stewardship of taxpayer dollars.
Vendors must meet the following requirements to obtain a Tax Verification Letter:
- Their B.C. corporate income tax and provincial sales tax (PST) filings must be up-to-date.
- They must not have a PST balance owing, unless:
- they have an acceptable payment arrangement in place with the B.C. Ministry of Finance, or
- they have a PST matter under appeal with the B.C. Ministry of Finance, and the PST balance owing relates to that matter.
If the vendor doesn’t have a PST account with the Province or is not a corporation subject to B.C. corporate income tax, a Tax Verification Letter is still required. The Ministry of Finance will provide the letter to vendors who are not obligated to file and pay taxes in B.C.
Tax Verification Letters received must be issued by the B.C. Ministry of Finance and will:
- indicate the vendor’s legal name,
- indicate the date of issue and the period of validity (e.g. one year), and
- be able to be used for multiple contracts.
When to Provide a Tax Verification Letter
Effective January 1, 2020 unless an exception applies, before the Province may sign a contract for goods, services or construction valued at $100,000 (including all fees, expenses and all options to extend or renew), the vendor must provide a valid Tax Verification Letter. A Tax Verification Schedule will also need to be attached to all applicable contracts and a valid Tax Verification Letter will need to be provided before the Province extends or renews such contracts. If the original Tax Verification Letter is still valid as of the date the contract is extended or renewed, a new Tax Verification Letter is not needed.
A contract that was signed before January 1, 2020 will not need a Tax Verification Letter unless that contract is extended or renewed.
Unless an exception applies, do not sign a contract or extend/renew an existing contract on behalf of the Province after January 1, 2020 without a valid Tax Verification Letter.
The following contracts for goods, services and construction do not require a Tax Verification Letter:
- Contracts valued at less than $100,000, including all fees, expenses and all options to renew or extend.
- Contracts being entered into in response to an unforeseen emergency.
- Contracts where only one vendor is qualified to provide the goods, services or construction.
Contracts related to government transfer payments that are covered by Chapter 21 of CPPM (i.e., grants, entitlements and Shared Cost Arrangements are excluded from the requirement).
Obtaining a Tax Verification Letter
Refer vendors to Vendor Information: Tax Verification Letter if they require more information on how to obtain a Tax Verification Letter.
What to Do with Tax Verification Letters
Keep a copy of the vendor’s Tax Verification Letter in the contract file. The original is not required, as the vendor may use their letter for multiple contracts with the Province.
Tax Verification Letters FAQs
Visit the Tax Verification FAQs for frequently asked questions and answers.