On July 9, 2026, the BC government released final regulations related to the expansion of the provincial sales tax (PST) to several professional services, including accounting services, with the new rules taking effect on October 1, 2026.
While the policy was previously announced as part of Budget 2026, these final regulations provide greater clarity on how the rules will be applied in practice and what they will mean for businesses purchasing or providing the affected services.
For many business owners, the immediate impact is straightforward: Accounting services that were previously exempt from PST will generally become subject to the province’s 7% sales tax. This means services such as bookkeeping, payroll administration, tax preparation, audits, and other professional accounting services may now include PST, depending on the nature of the engagement.
Accordingly, the new PST rules raise both significant policy and technical considerations.
CPABC’s input
Following consultations with indirect tax specialists from across the professional accounting profession, CPABC submitted a policy paper to the provincial government in June 2026. In the submission, CPABC encouraged the government to explore long-term sales tax modernization, particularly through the adoption of a value-added tax (VAT) model with general input tax credits for business inputs. CPABC also identified technical issues in the proposed rules, including concerns related to multi-jurisdictional engagements, subcontracted services, and services provided within corporate groups.
How the final regulations address some implementation issues
The final regulations provide additional clarity in several areas identified in CPABC’s submission, including multi-jurisdictional work, corporate-group services, and resale arrangements. Clarifying measures include:
- exemptions for work that relates to business activities and real assets outside British Columbia;
- exemptions that prevent PST from being charged multiple times on the same service; and
- exemptions for certain services provided within corporate groups to reduce the risk of double taxation.
The final guidance also provides additional direction on matters such as bundled services and the treatment of multi-jurisdictional engagements.
Although these measures provide greater certainty for businesses and practitioners, they do not resolve all the concerns raised in CPABC’s submission. Several broader policy questions, including the taxation of business inputs and the impact on smaller organizations, remain topics for ongoing discussion.
Why small businesses are paying attention
Despite the new exemptions, the PST expansion will increase costs for some businesses that rely on external accounting support. For example, a monthly bookkeeping engagement costing $800 would increase to $856 once PST applies, and a $4,000 year-end accounting and tax package would increase to $4,280.
The impact will vary by organization. Larger organizations typically have more capacity to absorb additional compliance and administrative costs, while smaller businesses and not-for-profit organizations often rely more heavily on external service providers. As a result, the impact of these changes affecting professional service costs may depend on an organization’s size and structure.
The bigger tax policy question
In its submission, CPABC also raised broader questions about the structure of BC’s sales tax system, many of which remain unresolved.
The submission highlighted differences between BC’s PST system and the VAT systems used in many other jurisdictions. Under a VAT model, businesses can generally recover taxes paid on business purchases through input tax credits. By contrast, PST can become part of a business’s operating costs, which may influence investment decisions and increase the cost of providing goods and services.
CPABC’s submission suggested that reducing these costs through a more modern consumption tax system could improve competitiveness, support investment, and contribute to long-term economic growth.
These larger policy questions extend well beyond accounting services and are likely to remain part of ongoing conversations about competitiveness, productivity, and economic growth in British Columbia.
Looking ahead
As October 1 approaches, the focus will shift from policy development to implementation. Businesses providing taxable professional services will need to ensure that they are registered to collect PST and prepared to comply with the new remittance and reporting requirements. To support implementation, the provincial government has released industry-specific guidance and educational resources, including a webinar on the new rules.
Ultimately, even though the final regulations provide greater clarity, the broader discussion about tax policy in BC remains unresolved. Questions about BC’s economic competitiveness, the taxation of business inputs, the impact on small businesses and not-for-profit organizations, and the merits of moving toward a VAT-style system remain important considerations for policymakers focused on competitiveness, productivity, and long-term economic growth.
Lori Mathison, FCPA, LLB, is the president and CEO of CPABC.
