British Columbia is not an HST province. Most taxable sales here carry two separate taxes: the federal GST at 5% and BC's PST at 7%. Getting that right in your ERP from day one saves hours of corrections at filing time. Here is how we set it up for BC clients. Tax rules have exceptions, so confirm your own situation with your accountant.
1. Start with the Canadian localization
Most ERP systems, including the one we implement, offer a Canadian accounting localization that installs a Canadian chart of accounts and tax templates for GST, HST and the provincial sales taxes, including BC PST. Choose it when you create the company, before any transactions exist. Changing localizations later is painful.
2. Use fiscal positions for out-of-province customers
A customer in Alberta pays GST only. A customer in Ontario pays HST. Customers outside Canada usually pay neither. A good ERP handles this with fiscal positions, which swap the taxes on each line automatically based on where the customer is, so your team does not have to remember the rules on every quote.
3. Set taxes on products, not invoices
Give every product and service its default taxes, GST plus PST for most taxable BC sales, so they flow into quotes, orders, invoices and the online store automatically. Some goods and services are PST-exempt or taxed differently. Flag those products once, with your accountant's guidance, rather than fixing invoices one by one.
4. Show prices the way your customers expect
Business quotes usually show prices before tax, with GST and PST listed separately. For an online store selling to consumers, decide whether prices display with or without tax, and keep it consistent across the shop, the cart and the invoice.
5. Registrations and thresholds
GST registration is generally required once taxable sales pass $30,000 in a single calendar quarter or over four consecutive calendar quarters, the small supplier threshold. BC PST has its own registration rules, including a small seller exemption for some businesses with gross revenue of $10,000 or less. Check both with your accountant before you go live.
6. Reconcile before you file
With taxes set up this way, your ERP keeps GST collected, GST paid on purchases and PST in separate accounts, which makes filing much faster as long as your bank statements are reconciled first. GST/HST returns go to the CRA, and BC PST returns are filed through eTaxBC.
Need a hand?
We implement ERP systems for businesses across the Fraser Valley and the Lower Mainland, including accounting, inventory, eCommerce and live Canada Post and UPS shipping rates. See our ERP services or book a free consultation.
Official sources
- GST/HST for businesses, Canada Revenue Agency
- When to register for and start charging the GST/HST, Canada Revenue Agency
- BC provincial sales tax (PST), Province of British Columbia
- Register to collect PST, including the small seller bulletin, Province of British Columbia
- About eTaxBC, Province of British Columbia