Provincial Sales Tax Act, Part 9 - Administration and Enforcement

Division 1 — Inspections and Audits

Section 194 – Inspection And Audit Powers

PST - SEC.194/Int.

References:

Act: Section 1 "accommodation", "boat", "director", "related service", "software", "taxable service", "telecommunication service", "vehicle"; Section 230

PSTR: Part 10

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Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 194 the authority for the director to enter a specified location to inspect, audit and examine records to determine compliance with the Act and the regulations.

Subsection 194(1) provides that in section 194, "specified location" means premises, a site, a vehicle, a boat, an aircraft or any other place or thing

(a) occupied or used by a person in relation to a business carried on by the person,

(b) where or in which the records of a person are kept, or

(c) at, in or from which

(i) tangible personal property is manufactured, sold, leased, stored or used,

(ii) software is developed, sold, stored or used, or

(iii) a taxable service is provided, sold or used.

Subsection 194(2) provides that except as limited by subsections 194(4) and 194(6), to determine whether the Act and the regulations are being or have been complied with, the director may enter at any reasonable time a specified location, occupied by a person, and may do any of the following at the specified location:

(a) inspect, audit and examine records;

(b) inspect tangible personal property manufactured, acquired, sold, leased, stored or used by the person;

(c) inspect software developed, provided, acquired or sold by the person;

(d) inspect a related service or a telecommunication service provided, acquired or sold by the person;

(e) inspect accommodation offered or available for sale, provided, acquired, sold or used by the person;

(f) inspect or ascertain the quantity, value or use of tangible personal property manufactured, acquired, sold, leased, stored or used by the person;

(g) inspect or ascertain the volume, value or use of software developed, provided, acquired, sold, stored or used by the person;

(h) inspect or ascertain the volume, value or use of a related service or a telecommunication service provided, acquired, sold, stored or used by the person;

(i) inspect or ascertain the volume, value or use of accommodation offered or available for sale, provided, acquired, sold or used by the person;

(j) inspect the specified location and any activities carried out at the specified location.

Subsection 194(3) provides that a person occupying a specified location must

(a) produce all records as may be required by the director, and

(b) answer all questions of the director regarding the matters referred to in subsection 194(2).

Subsection 194(4) provides that the power to enter a place under subsection 194(2) must not be used to enter a dwelling occupied as a residence without the consent of the occupier except under the authority of a warrant under subsection 194(5).

Subsection 194(5) provides that on being satisfied by evidence on oath that there are in a place records or other things for which there are reasonable grounds to believe that they are relevant to the matters referred to in subsection 194(2), a justice may issue a warrant authorizing a person named in the warrant to enter the place in accordance with the warrant in order to exercise the powers referred to in paragraphs 194(2)(a) to 194(2)(j).

Subsection 194(6) provides that except in accordance with the regulations (as provided by PSTR Part 10 [Claims of Solicitor-client Privilege]), the power to inspect, audit and examine records under paragraph 194(2)(a) must not be used to inspect, audit and examine a record that is in the possession of a lawyer if the lawyer at that time claims that a particular client or a particular former client of the lawyer has solicitor-client privilege in relation to the record.

Subsection 194(7) provides that a person must not

(a) interfere with, hinder or molest a person doing anything that the person is authorized to do under section 194, or

(b) prevent or attempt to prevent a person from doing anything that the person is authorized to do under section 194.

Section 195 – Requirement To Provide Records

PST - SEC.195/Int.

References:

Act: Section 1 "director"

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Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 195 that when required by the director, a person must provide to the director all records that the director considers necessary to determine whether the Act and the regulations are being or have been complied with.

Section 196 – Demand For Information

PST - SEC.196/Int.

References:

Act: Section 1 "director"; Section 229

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Interpretation (Issued: 2013/12; Revised: 2023/08, 2024/05)

Effective April 25, 2024, Bill 3, Budget Measures Implementation Act, 2024 amended subsection 196(1) to clarify that the director specifies how required returns, information, records, or written statements under this subsection can be provided to the ministry (e.g. by mail, online, etc.).

Effective October 31, 2019, Bill 35, Miscellaneous Statutes Amendment Act (No.2), 2019, provides under section 196 specific rules for giving a demand for information and provides consistent terminology and to clarify that the general rules for giving documents apply by replacing “delivered” with “given”. Subsection 196(2)(a) is repealed and replaced with a new subsection for the same purpose setting out how a demand for information must be given to a person.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 196 the authority for the director to require, by demand notice, specified information or records from any person.

Section 196.1 – Evidence – Copies Of Records

PST - SEC.196.1/Int.

References:

Act: Section 1 "director"

Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 196.1.

Section 196.1 provides that a record certified by the director to be a copy of a record obtained by the director under the Act is evidence of the nature and content of the original.

Division 2 — Assessments

Section 197 – Notice Of Assessment

PST - SEC.197/Int.

References:

Act: Section 1 "assessment", "director", "online marketplace facilitator"; Section 196.2; Section 198; Section 199; Section 199.1; Section 199.2; Section 202; Section 203; Section 204; Section 205; Section 206; Section 206.1; Section 210

CTA: Section 43.1

MFTA: Section 41.1

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Interpretation (Issued: 2013/12; Revised; 2023/08)

Effective July 1, 2022, Bill 6, Budget Measures Implementation Act, 2022, amended paragraph 197(1)(a) to add a reference to the new assessment provision under section 199.2. The director must give a notice of assessment to a person if the director makes an assessment related to their joint and several liability on a transaction made through an online marketplace facilitator.

Effective March 25, 2021, Bill 12, Miscellaneous Statutes (Minor Corrections) Amendment Act, 2021, provides under section 197 (1.1) and (1.2) consistent terminology to clarify that the general rules for giving documents apply, for example by replacing "issued" with "given." 

Effective April 1, 2020, Bill 2, Budget Measures Implementation Act, 2018, amended section 197 by adding subsection 197(1.1) and subsection 197(1.2). The new subsections allow for the director to impose a fee on a person for a tax auditor attending, when necessary, a location outside of BC to determine compliance with the Act and the regulations.

Effective October 31, 2019, Bill 35, Miscellaneous Statutes Amendment Act (No.2), 2019, provides under section 197 consistent terminology to clarify that the general rules for giving documents apply, for example by replacing "issue" with "give." 

Effective April 11, 2019, Bill 5, Budget Measures Implementation Act, 2019, amended paragraph 197(1)(a) to add a reference to the new assessment provision in section 199.1 [assessment if joint and several liability for amount assessed or imposed against designated collector].

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 197 authority for, and the circumstances in which, the director may or must issue a notice of assessment.

Subsection 197(1) provides that subject to subsection 197(3), the director must issue a notice of assessment to the person liable to pay an amount assessed or imposed if the director

(a) makes an assessment under section 198 [assessment of tax not remitted by collector], section 199 [assessment if tax not paid or remitted or if excess refund] or section 210 [assessment against board member], or

(b) imposes a penalty under section 202 [failure to register], section 203 [failure to levy tax], section 204 [incorrect information] or section 205 [failure to remit or pay tax].

Subsection 197(2) provides that if the director assesses interest under section 206 [interest until notice of assessment issued] or section 206.1 [interest after notice of assessment issued], the director may issue a notice of assessment to the person liable to pay the amount of interest assessed.

Subsection 197(3) provides that in addition to, or as an alternative to, issuing a notice of assessment under subsection 197(1) or 197(2), the director may issue a notice of assessment to the custodian or trustee in bankruptcy of the person referred to in subsection 197(1) or 197(2).

Subsection 197(4) provides that evidence that a notice of assessment under subsection 197(1) or 197(2) has been issued is proof, in the absence of evidence to the contrary, that the amount assessed or imposed under the Act is due and owing, and the onus of proving otherwise is on the person liable to pay the amount assessed or imposed.

Subsection 197(5) provides that subject to being amended, changed or varied on appeal or by reassessment, an assessment or penalty made or imposed under the Act is valid and binding despite any error, defect or omission in the assessment or penalty or in procedure.

Section 198 – Assessment Of Tax Not Remitted By Collector

PST - SEC.198/Int.

References:

Act: Section 1 "collector", "collector’s return", "director"; Section 179; Section 197; Section 200; Section 210; Section 211

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Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 198 that if a collector fails to file a collector's return as required under the Act or if the records of a collector do not substantiate a collector's return filed by the collector, the director may

(a) estimate, in a manner and by a procedure the director considers adequate and expedient, the amount of tax that a collector was required to remit under section 179 [collection and remittance of tax by collector] but has not remitted, and

(b) make an assessment against the collector for the amount estimated under paragraph 198(a).

Section 199 – Assessment If Tax Not Paid Or Remitted Or If Excess Refund

PST - SEC.199/Int.

References:

Act: Section 1 "assessment", "director"; Section 159; Section 160; Section 187; Section 197; Section 200; Section 201; Section 204; Section 210; Section 222

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Interpretation (Issued: 2013/1; Revised: 2016/012)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 amended section 199 by adding a new subsection (2.1) and amending subsection (3).

The amendment clarifies the provision dealing with assessments in relation to amounts deducted under section 159 (3) and section 160(2).

The amendment provides clear authority to the director to assess for both excess amounts that were refunded and excess amounts that were deducted, including a refund or deduction to a collector with respect to tax required to be remitted.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 199 authority for the director to calculate the amount of tax and make an assessment against a person if the person has not paid or remitted tax, or received a refund of tax greater than the amount to which the person was entitled.

Section 199.2 – Assessment If Joint And Several Liability For Assessment Or Penalty

PST - SEC.199.2/Int.

References:

Act: Section 1 "assessment", "director", "online marketplace facilitator"; Section 179.3; Section 197; Section 198; Section 199; Section 200; Section 203; Section 211

Interpretation (Issued: 2023/08)

Effective July 1, 2022, Bill 6, Budget Measures Implementation Act, 2022 added section 199.2. Subsection 199.2(1) authorizes an assessment against a person who is jointly and severally liable to pay an amount assessed or imposed against an online marketplace facilitator.

Subsection 199.2(2) notes that Section 200 [assessment period under sections 198 and 199] applies to such an assessment.

Subsection 199.2(3), through its reference to subsections 203(2.1) and (2.2), allows a person assessed under 199.2(1)(b), for failure to levy tax, to sue the person who was liable to pay tax not levied by the online marketplace facilitator and to retain any amount recovered in a legal proceeding against that person as compensation for the amount assessed (and paid) under 199.2(1)(b).

Section 200 – Assessment Period Under Sections 198 And 199

PST - SEC.200/Int.

References:

Act: Section 1 "assessment", "director"; Section 198; Section 199

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Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 200 the assessment period for assessments made under section 198 or section 199.

Subsection 200(1) provides that in making an assessment under section 198 [assessment of tax not remitted by collector] or section 199 [assessment if tax not paid or remitted or if excess refund], the director must not include a period longer than 4 years before the date of the first notice of assessment.

Subsection 200(2) provides that despite subsection 200(1), the director may enter into a written agreement with a person in which the person waives subsection 200(1) and allows the director, in making an assessment under section 198 or section 199, to include any period specified in the agreement.

Subsection 200(3) provides that despite subsections 200(1) and 200(2), in making an assessment under section 198 or section 199, the director may include any period if the assessment relates to a contravention, of the Act or the regulations, involving wilful default or fraud.

Section 201 – Anti-Avoidance Rule

PST - SEC.201/Int.

References:

Act: Section 1 "assessment", "director"; Section 199; Section 203

Interpretation (Issued: 2013/12; Revised: 2014/09)

Effective April 1, 2013, Bill 8 - Budget Measures Implementation Act, 2014 amended section 201 by adding a reference to "British Columbia" in subparagraphs 201(1)(c)(ii) and 201(1)(c)(iii). The amendment clarifies that the laws of BC are included.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 201 the general anti-avoidance rule that provides the director with authority to determine the tax consequences to a person where a transaction is an avoidance transaction. If a transaction is an avoidance transaction, the director may determine the tax consequences to a person in a manner that is reasonable in the circumstances in order to deny a tax benefit that would arise from the transaction.

Division 3 — Penalties And Interest

Section 202 – Failure To Register

PST - SEC.202/Int.

References:

Act: Section 1 "director", "online marketplace facilitator", "online marketplace service"; Section 168; Section 169; Section 170; Section 171; Section 172; Section 172.1; Section 172.3; Section 172.4; Section 197; Section 211

Interpretation (Issued: 2013/12; Revised: 2016/01; 2023/08)

Effective July 1, 2022, Bill 6, Budget Measures Implementation Act, 2022 amended section 202 by adding references to section 172.3 [online marketplace facilitator must be registered] and 172.4 [person who provides online marketplace services must be registered]. The director may impose penalties if persons who are online marketplace facilitators or who provide online marketplace services wilfully do not register.

Effective September 1, 2015, Bill 10, Budget Measures Implementation Act, 2015 amended section 202 by adding a reference to section 172.1 [person located outside British Columbia must be registered]. The amendment is consequential to the addition of section 172.1.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 202 that if the director is satisfied that a person wilfully contravened section 169 [vendors and lessors must be registered], section 170 [contractor must be registered], section 171 [direct seller must be registered] or section 172 [person located in Canada but outside British Columbia must be registered], in addition to imposing any other penalty under the Act, the director may impose on the person a penalty equal to 25% of the amount

(a) levied and remitted or required to be levied and remitted under the Act by the person for the period that person was not registered under section 168 [registration] as required under the Act, or

(b) calculated by the director, in a manner and by a procedure the director considers adequate and expedient, as the amount of tax not remitted by the person as required under the Act.

Section 203 – Failure To Levy Tax

PST - SEC.203/Int.

References:

Act: Section 1 "assessment", "collector", "director", "multijurisdictional vehicle", "online marketplace service", "vehicle"; Section 37; Section 39; Section 44; Section 49; Section 92; Section 93; Section 95; Section 105; Section 119; Section 123.1; Section 125; Section 130; Section 134.3; Section 145; Section 197; Section 201; Section 206; Section 210; Section 211

PSTR: Section 13

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Interpretation (Issued: 2013/12; Revised: 2014/09; 2023/08)

Effective July 1, 2022, Bill 6, Budget Measures Implementation Act, 2022, amends subsection 203(1.1) to add a reference to subsection 134.3(4). The director may impose a penalty against a collector who, upon selling an online marketplace service to a person who alleges it is for resale, does not levy tax under subsection 134.3(4) despite not obtaining from that person a declaration form, if required, and other information or documents required by regulation or by the director.

The amendments also add subsection 203(2.01), which provides that if two or more persons are required to levy and collect tax in respect of a transaction but fail to do so, only a single penalty is applied, but both parties are liable.

Effective June 17, 2021, Bill 4, Budget Measures Implementation Act, 2021, amends subsection 203(1.1) to add a reference to subsection 39(4). This amendment provides the director with the authority to impose a penalty against a collector who, upon leasing a vehicle to a customer in B.C. who alleges they will immediately license the vehicle as a multijurisdictional vehicle, does not levy tax under subsection 39(4) despite not obtaining their customer’s prorating agreement account number or an exemption form.

Effective August 14, 2020, Bill 4, Budget Measures Implementation Act, 2020, amends subsection 203(1.1) by adding a reference to subsection 49(9.1). This amendment provides the director with the authority to impose a penalty against a collector who, upon selling and delivering a vehicle to a customer in B.C., does not levy tax under subsection 49(9.1) despite having reason to believe their customer does not intend to immediately license the vehicle as a multijurisdictional vehicle.

Effective February 19, 2014, Bill 8 - Budget Measures Implementation Act, 2014 amends section 203 by adding a new subsection (1.01). The new subsection provides the director with additional flexibility in assessing a penalty under section 203. Under the special (1.01) rule, the director may subtract from the collector penalty any amount the person ultimately liable to pay the tax already paid to government.

Effective June 23, 2014, Bill 8 - Budget Measures Implementation Act, 2014 amends section 203 by adding a new subsection 203(6). The subsection applies subsections (1), (1.01) and (2) to (5) as if the person who sold the liquor at auction were a collector.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 203 that the director must impose a penalty if a collector fails to levy tax as required under the Act or if a collector has not levied tax under specified taxing provisions because their customer claimed an exemption that the collector had reason to believe that they were not entitled to.

Section 204 – Incorrect Information

PST - SEC.204/Int.

References:

Act: Section 1 "assessment", "director"; Section 37; Section 49; Section 80.1; Section 197; Section 199; Section 211

PSTERR: Part 5

PSTR: Section 94

Interpretation (Issued: 2013/12; Revised: 2014/09)

Effective April 1, 2013, Bill 8 - Budget Measures Implementation Act, 2014 amended section 204 by adding a reference to subsection 80.5(7) (which was also added by Bill 8).

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 204 that the director must impose a penalty if a person claims an exemption under PSTERR Part 5 [Production Machinery and Equipment], other than PSTERR section 112 or PSTERR section 113, and declares incorrect information in a declaration that is relied on by a contractor (or subcontractor) in relation to their claiming an exemption under section 80.1 [contractor exempt from tax under section 37 or 49 if other person would be exempt].

Section 205 – Failure To Levy, Remit Or Pay Tax

PST - SEC.205/Int.-R.1

References:

Act: Section 1 "director"; Section 197; Section 211

PSTR: Section 95

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Interpretation (Issued: 2013/12; Revised: 2017/09)

Effective May 19, 2016, Bill 14, Finance Statutes Amendment Act, 2016 repealed and replaced paragraphs 205(b) and (c) to clarify that the director may impose penalties under paragraphs (b) and (c) on a person who deducts an amount in excess of the amount they are entitled to deduct or receives a refund in excess of the amount they are entitled to receive. The section is intended to serve as a deterrent by providing the director with the authority to impose penalties on all amounts for which assessments can be made.

Bill 14 added a transition provision to provide that the penalties under section 205 for a person who deducts an amount in excess of the amount they are entitled to deduct or receives a refund in excess of the amount they are entitled to receive may be imposed by the director within 4 years before the date the amendments came into force.

Effective April 1, 2013, Bill 8 - Budget Measures Implementation Act, 2014 amended section 205 by adding a reference to "levy" in paragraph 205(c). This insures that the director may impose an additional penalty in relation to a failure to levy tax and not just failure to remit or pay tax.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides the director, under section 205, with the ability to impose additional penalties for failure to remit or pay tax. The penalties range from 10% percent to 100% depending on the circumstances.

For the purposes of subparagraph 205(c)(i), under PSTR subsection 95(1) [prescribed circumstance and amount for penalty under section 205 of Act], the prescribed circumstance is the failure to remit tax in accordance with PSTR paragraph 73(a) [prescribed manner for remitting tax].

PSTR paragraph 73(a) provides that if the person remitting the tax had a total of $1.5 million or more of sales or leases of property or services in Canada in the previous 12 months, the tax must be remitted by an electronic method specified by the director (i.e., through eTax BC, through the online banking service of a financial institution, through the payment and filing service of a financial institution, by electronic funds transfer or by wire transfer).

For the purposes of subparagraph 205(c)(i), under PSTR subsection 95(2), the prescribed amount is 5% of the amount not remitted in accordance with the manner prescribed in PSTR paragraph 73(a).

R.1 10% Penalty For Late Or Underpaid Returns (Issued: 2015/07)

Subject to the warning policy outlined below, the 10% penalty authorized by subparagraph 205(c)(ii) is imposed when a collector's return is filed late or is underpaid. Commission is also disallowed.

The ministry issues a warning letter to a collector on the first late or underpaid return (within 12 months, for monthly filers). This warning is provided in respect of a good history of tax reporting and also generally applies to new registrants who are late in filing or who underpay their first collector's return.

An exception to this warning policy applies in the case of some new registrants who are late in applying to register (i.e., collectors who do not register at or before the time required by Division 1 [Registration] of Part 8 [Registration and Tax Collection]). If a collector is six or more months late in applying to register, the warning policy does not apply to that collector's first return: the 10% penalty will be imposed and commission will be disallowed.

Section 206 – Interest Until Notice Of Assessment Given

PST - SEC.206/Int.

References:

Act: Section 1 "assessment", "collector", "director"; Section 182.2; Section 196.2; Section 197; Section 203; Section 211

PSTR: Section 96

Interest Rate Under Various Statues Regulation

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Interpretation (Issued: 2013/12; Revised: 2014/09; Revised: 2023/08)

Effective April 1, 2020, Bill 2, Budget Measures Implementation Act, 2018, amended section 206 by adding a new subsection (2.1). The new subsection provides that interest may not be assessed in relation to fees imposed for attending locations outside British Columbia.

Effective October 31, 2019, Bill 35, Miscellaneous Statutes Amendment Act (No.2), 2019, provides under section 206 consistent terminology for the purposes of clarifying that the general rules for giving documents apply by replacing “issued” with “given”.

Effective June 23, 2014, Bill 8 - Budget Measures Implementation Act, 2014 amended section 206 by adding a new subsection (3.1). The new subsection is related to the addition of the collection obligation on a person who is not a collector but is required to collect PST on liquor sold at auction under section 182.2. The subsection applies subsection (3) as if the person were a collector.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 206 that the director may or must assess interest on an amount owing to government.

Subsection 206(2) provides the director with the ability to assess interest on an amount owing to government until the date the notice of assessment is given. The subsection refers to a prescribed manner and prescribed rate. The manner is prescribed in section 96 of the PSTR and the rate is prescribed in section 1 [interest rate on amounts due under certain Acts] of the Interest Rate Under Various Statues Regulation.

Subsection 206(3) provides for a non-optional interest assessment. The director must assess interest on a section 203 [failure to levy tax] penalty. The interest under subsection 206(3) is assessed from the date the collector was required to remit the tax.

Subsection 206(4), subsection 206(5) and subsection 206(6) provide a special interest rule when a person is entitled to a refund but also owes a non-assessed amount that exceeds or equals the refund amount. In these cases, interest may be assessed on the non-assessed amount by assessing interest on the non-assessed amount less the refund amount. Further, no interest is payable in relation to the refund.

Subsection 206(7), subsection 206(8) and subsection 206(9) provide a second special interest rule that is essentially the reverse rule of subsection 206(4), subsection 206(5) and subsection 206(6). This special interest rule applies when a person is entitled to a refund but also owes a non-assessed amount that is less than the refund. In this situation, no interest may be assessed in relation to the non-assessed amount. Further, in relation to the refund, interest is payable on the refund less the non-assessed amount.

Section 206.1 – Interest After Notice Of Assessment Given

PST - SEC.206.1/Int.

References:

Act: Section 1 "assessment", "director"; Section 197; Section 211

PSTR: Section 96

Interest Rate Under Various Statues Regulation

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Interpretation (Issued: 2013/12; Revised: 2023/08)

Effective October 31, 2019, Bill 35, Miscellaneous Statutes Amendment Act (No.2), 2019, provides under section 206.1 consistent terminology for the purposes of clarifying that the general rules for giving documents apply by replacing “issued” with “given”.

Effective April 1, 2013, Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 added section 206.1.

Section 206.1 provides that the director may assess at any time interest, calculated at the prescribed rate and in the prescribed manner, on an amount owing to the government under the Act from the date that a notice of assessment is given in relation to the amount owing.

The prescribed rate is provided by section 1 [interest rate on amounts due under certain Acts] of the Interest Rate Under Various Statues Regulation, and the prescribed manner is provided by PSTR section 96 [calculation of interest].

Division 4 — Board Member's Liability

Section 207 – Board Member’s Liability

PST - SEC.207/Int.

References:

Act: Section 1 "board member"; Section 208; Section 210; Section 218

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Interpretation (Issued: 2013/12; Revised: 2016/01)

Effective March 25, 2015, Bill 13, Finance Statutes Amendment Act, 2015 amends section 207 by clarifying that the joint and several liability of a board member under the section includes liability for interest on penalties.

The amendment ensures that the amount that can be assessed against a board member and the liability of the board member are consistent.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 207 that a board member of a corporation is jointly and severally liable with the corporation to pay an amount equal to the amount of tax if the corporation fails to levy, collect or remit tax in specified circumstances.

Section 208 – Refunds Where Joint And Several Liability

PST - SEC.208/Int.

References:

Act: Section 1 "board member", "director"; Section 152; Section 207

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Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 208 that the director must provide a refund if one or more board members have paid all or part of a corporation’s tax debt, where either the corporation pays the debt at a later date or the government receives payments in excess of the debt the corporation owes.

Subsection 208(1) provides that despite subsection 152(2) [refund if no obligation to pay or collect] or any regulation that requires the payment of a refund of amounts collected to a corporation, if the director is satisfied that the total of the amount paid by one or more board members of the corporation who are jointly and severally liable with the corporation under subsection 207(1) [board member’s liability] and the amount, if any, paid by the corporation exceeds the amount owed by the corporation under the Act for the period that the board members who made the payments were jointly and severally liable with the corporation, the director must pay a refund from the consolidated revenue fund in accordance with the following:

(a) if only one board member paid all or part of the amount for which one or more board members and the corporation were jointly and severally liable under subsection 207(1), refund to the board member the amount of the excess, up to the amount paid by the board member;

(b) if 2 or more board members paid the amount or a part of the amount for which board members and the corporation were jointly and severally liable under subsection 207(1), refund to the board members the amount of the excess divided proportionately between the board members, up to the amount paid by each board member;

(a) after making the payment under paragraph 207(1)(a) or paragraph 207(1)(b), refund to the corporation any remaining amount of the excess, up to the amount paid by the corporation.

Subsection 208(2) provides that a refund under paragraph 208(1)(b) must be based on the ratio of the amounts paid by the board members who are jointly and severally liable under subsection 207(1) for the applicable period of the refund.

Subsection 208(3) provides that a refund may be paid under subsection 208(1) only to a board member who or corporation that has applied for a refund.

Section 209 – Deemed Board Member

PST - SEC.209/Int.

References:

Act: Section 1 "board member", "director"; Section 165; Section 233

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Interpretation (Issued: 2013/12; Revised: 2023/08, 2024/05)

Effective April 25, 2024, Bill 3, Budget Measures Implementation Act, 2024 amended subsection 209(1) to clarify that the director specifies how records and information required under this subsection can be provided to the ministry (e.g. by mail, online, etc.).

Effective October 31, 2019, Bill 35, Miscellaneous Statutes Amendment Act (No.2), 2019, repealed and replaced subsection 209(6) with a new subsection for the same purpose (establishing that the director must immediately notify a person in writing who is found to have performed functions of a member of the board of directors of a corporation) and clarifies that the general rules for giving documents apply.

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 as amended by Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013 provides under section 209 authority for the director to determine a person who performs some or all of the functions of a board member to be a board member of a corporation and, as a result, the person is deemed to be a board member for the purposes of the Act.

Section 210 – Assessment Against Board Member

PST - SEC.210/Int.

References:

Act: Section 1 "assessment", "board member", "director"; Section 197; Section 198; Section 199; Section 203; Section 207

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Interpretation (Issued: 2013/12)

Effective April 1, 2013, Bill 54, Provincial Sales Tax Act, 2012 provides under section 210 that if the director decides that a board member is jointly and severally liable for an amount under subsection 207(1), the director may assess the board member for the amount assessed against or imposed on the corporation, as well as any penalty and interest on that amount and penalty.

Subsection 210(1) provides that if the director decides that a board member is jointly and severally liable for an amount under subsection 207(1), the director may assess the board member for the following:

(a) the amount assessed under section 198 [assessment of tax not remitted by collector] against the corporation as the tax the corporation was required to remit during the term of the board member, any related penalty and any interest on that amount and the penalty;

(b) the amount assessed under subsection 199(2) [assessment if tax not paid or remitted or if excess refund] against the corporation for the corporation's failure to remit tax as required during the term of the board member, any related penalty and any interest on that amount and the penalty;

(c) the amount imposed under section 203 [failure to levy tax] on the corporation for the corporation's failure to levy tax as required during the term of the board member, any related penalty and any interest on that amount and the penalty.

Subsection 210(2) provides that the director may not make an assessment under subsection 210(1) in respect of the liability of a board member under section 207 [board member’s liability] if

(a) the person is no longer a board member of that corporation, and

(b) it is more than 2 years after the last date that the person was a board member of that corporation.