2020 – 2021 PST REBATE PROGRAM FOR CAPITAL PURCHASES
Program Source
BC Ministry of finance has recently announced temporary provincial sales tax (PST) program to help corporations recover from the financial impacts of COVID-19.
Below is a summary of the program that companies who are qualified manufacturers, oil and gas producers or logging companies can use to take advantage of this rebate.
Program Summary
Eligible Purchases
Income producing goods (assets) for which PST was paid or self-assessed at the time of purchase.
Goods don’t need to be depreciated to qualify if the good falls under CCA class definition the rebate could be claimed
Timeline
Purchases paid or become due between September 17, 2020 and March 31, 2022.
Process
Maximum three applications:
1st between April 1, 2021 and September 30, 2021
2nd between October 1, 2021 and March 31, 2022
3rd between April 1, 2022 and September 30, 2022
Deadline
No applications will be accepted after September 31, 2022
Companies Eligible
Corporations
Process
Invoices and proof of payment.
Certificate of incorporation
BC PST Rebate Purchase Schedule
Invoices are not required at the time of application (may be requested later)
Eligible Assets
Class 8, 43, 53
Tools costing $500 or more
Machinery and equipment, tanks, vats and kilns
Photocopiers and phones
While manufacturers are already exempt from PST for most Production Machinery and Equipment (PME) you will be able to claim PST rebate for new:
- Compressors, pumps, pipes and valves.
- Portable mobile and standby generators.
- Equipment used to bring electricity to non-exempt PME
- Equipment to control and operate non-exempt PME
Forklifts and other equipment used at non-qualified portion of the site.
Class 12
Tools under 500
Computer software such as ERP, databases and office productivity (non systems)
Class 16
|
Freight trucks rated above 11,788 kg |
Class 43.1 and 43.2
Electrical vehicle charging stations (EVCSs).
Class 46
|
Data network infrastructure equipment and systems software for that equipment |
Class 50
Computers, computer hardware, servers and systems software for that equipment |
Class 54 and 55
|
Zero emission vehicles |
Non-Eligible Assets
- Vehicles, other than zero-emission vehicles
- Goods purchased to be installed as an improvement to real property
How to capture exempt purchases.
Method 1
Set-up new sales tax in your ERP system, that is remit to vendor and charged to a designated GL account. When applicable purchase happens your buyers or AP administrators can select special tax to capture all applicable invoices for refund.
Benefits: Easy to set-up and allows for quick rebate application.
Disadvantages: Requires buyers and AP to understand what equipment is exempt and manually identify it on every purchase.
Contact us for instructions in Oracle Financials, SAP, MGP, Avantis, Sage ERP and any other ERP system. We can also set-up a webinar for your AP and Buyers to explain them how to capture invoices for this rebate.
Method 2
Keep a tally of all ongoing projects that have equipment listed above, this may require a review of projects already approved. For rebate application download purchases for those projects and submit invoices for refund.
Benefits: requires no set-up, keeps decisions in accounting group.
Disadvantages: Takes time away from accounting group to review and keep track of all applicable projects.
Contact us if you need help reviewing your projects and whether your purchases will qualify.
Conclusion
You may want to choose a combination of two options to ensure that you capture most of the rebate. For companies who choose Versatile Analytics for their PST review we will scan all applicable PST exemptions for this rebate at no extra cost. You fee is based on number of invoices and stays constant regardless of the refund!
Get More Help!
Visit our BC PST resource page to download a PDF copy of this post and other PST resources such as PME Exemption Decision Tree.
Contact us if you have any questions about this guide or need general advice on PST.
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