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B.C. Reg. 97/2013
O.C. 130/2013
Deposited March 1, 2013
effective April 1, 2013
This consolidation is current to June 21, 2022.
Link to consolidated regulation (PDF)
Link to Point in Time

Provincial Sales Tax Act

Provincial Sales Tax Exemption and Refund Regulation

[Last amended October 12, 2021 by B.C. Reg. 262/2021]

Part 3 — Exemptions in Relation to Software

Division 1 — Exemptions in Relation to Software

Software obtained by qualifying school, school board or similar authority

64   (1) Subject to subsection (2), software is exempt from tax imposed under Part 4 of the Act, other than section 109 of that Part, if the software is obtained by a qualifying school, school board or similar authority for use substantially as a teaching aid for students.

(2) The exemption under subsection (1) does not apply to software obtained for use by teachers to assess or evaluate students or to report on students' progress.

(3) Subsection (1) of this section is prescribed for the purposes of section 145 (1) (b) [provisions providing exemptions in relation to software] of the Act.

[am. B.C. Reg. 216/2013, App. 2, s. 3.]

New resident's effects — software

65   (1) Software is exempt from tax imposed under section 106 [tax on use of software on device in British Columbia] of the Act if the software was purchased by an individual

(a) for use solely for a non-business purpose, and

(b) at least 30 days before the individual became a resident of British Columbia.

(2) Software that qualified for an exemption under subsection (1) on the date on which the software was first used in British Columbia and that is subsequently used for a business purpose is exempt from tax imposed under section 109 [tax if use of software changes] of the Act if

(a) the use of the software for a business purpose does not begin within the first 6 months after the individual referred to in subsection (1) of this section became a resident of British Columbia,

(b) the software was owned and used by that individual for more than 3 years before that individual became a resident of British Columbia, and

(c) the individual referred to in subsection (1)

(i) previously paid tax under the Act or the Social Service Tax Act in respect of the software and has not obtained and is not entitled to obtain, under those Acts, a refund of that tax,

(ii) previously paid tax under section 165 (2), 212.1 or 218.1 or Division IV.1 of Part IX of the Excise Tax Act in respect of the software and has not obtained and is not entitled to obtain, under Part IX of that Act, a refund of or a credit or rebate for that tax, or

(iii) previously paid sales tax in respect of the software to another province and has not obtained and is not entitled to obtain a refund of or a credit or rebate for that sales tax.

Commercial fishers

66   (1) Software designed for use on electronic monitoring equipment described in item 22 of Schedule 3 [Fishing Equipment for Commercial Fishing Purpose] is exempt from tax imposed under Part 4 of the Act, other than section 109 of that Part, if

(a) the software is obtained by a qualifying commercial fisher for use on electronic monitoring equipment described in item 22 of Schedule 3, and

(b) the electronic monitoring equipment is to be used by a qualifying commercial fisher solely for a commercial fishing purpose.

(2) Subsection (1) of this section is prescribed for the purposes of section 145 (1) (b) [provisions providing exemptions in relation to software] of the Act.

(3) For the purposes of section 145 (1.1) (a) [evidence required to claim certain exemptions in relation to tangible personal property or software] of the Act, in relation to a person who alleges that software is exempt under subsection (1) of this section, the collector is required to obtain a declaration in a form acceptable to the director.

Transfer due to dissolution of marriage or relationship

67   An individual is exempt from tax imposed under Part 4 of the Act in respect of software transferred to the individual from a spouse or former spouse of the individual under

(a) an agreement dividing property under Part 5 [Property Division] or 6 [Pension Division] of the Family Law Act,

(b) a written separation agreement, or a marriage agreement, referred to in the Family Relations Act, or

(c) an order of a court on the dissolution of a marriage or marriage-like relationship.

Custom software, custom modified software and other software

68   (1) In this section:

"custom modified software" means software that is modified

(a) in a manner that involves changes to the source code, and

(b) solely to meet the requirements of a specific person

if

(c) the purchase price is for the software as modified, and

(d) that purchase price is greater than double what it would be for the software in its unmodified form;

"custom software" means

(a) software that is developed solely to meet the requirements of a specific person, and

(b) modifications to software referred to in paragraph (a), if the modifications are performed for that specific person.

(2) Custom software or custom modified software is exempt from tax imposed under Part 4 of the Act, other than section 109 of that Part, if the custom software or custom modified software is obtained by, or on behalf of, the specific person referred to in the definition of "custom software" or "custom modified software", as applicable, in subsection (1) of this section, for that specific person's own use.

(3) Custom software or custom modified software is exempt from tax imposed under Part 4 of the Act if the custom software or custom modified software is sold, as part of a business sold as a going concern, by a person who retains no rights or interests in the custom software or custom modified software.

(4) Software is exempt from tax imposed under Part 4 of the Act if

(a) the software is sold, as part of a business sold as a going concern, by a person who retains no rights or interests in the software,

(b) before the sale referred to in paragraph (a), the software was modified

(i) in a manner that involved changes to the source code, and

(ii) solely to meet the requirements of a specific person, and

(c) the purchase price or lease price, as the case may be, of the modifications referred to in paragraph (b) was

(i) segregated on the receipt, bill or invoice provided to the purchaser or lessee, and

(ii) greater than the purchase price or lease price, as the case may be, of the software in its unmodified form.

(5) Software source code in non-executable form is exempt from tax imposed under Part 4 of the Act.

(6) Subsections (3) and (4) of this section are prescribed for the purposes of section 112 (2) [tax on purchase of software by small seller] of the Act.

Software purchased by First Nation individual or band

68.1   (1) Software is exempt from tax imposed under Part 4 of the Act if the software is

(a) purchased by a First Nation individual or a band, and

(b) for use on or with an electronic device that is

(i) owned or leased by the First Nation individual or band, and

(ii) ordinarily situated on First Nation land.

(2) Subsection (1) of this section is prescribed for the purposes of section 145 (1) (b) [provisions providing exemptions in relation to software] of the Act.

[en. B.C. Reg. 216/2013, App. 1, s. 10.]

Software incorporated into prototypes

69   For the purposes of section 113 (1) (d) [exemptions in relation to software for prototypes] of the Act,

(a) software that is not specifically designed for a prototype referred to in that provision is prescribed software, and

(b) making a copy of a prototype solely for the purpose of testing the prototype as part of the research and development activities referred to in that provision is a prescribed purpose.

Division 2 — Evidence Relating to Exemptions under Act in Respect of Software

Evidence relating to exemptions under section 113 (1) of Act

70   For the purposes of section 145 (1.1) [evidence required to claim certain exemptions in relation to tangible personal property or software] of the Act, in relation to a person who alleges that software is exempt under section 113 (1) [exemptions in relation to software] of the Act, the collector is required to obtain

(a) that person's registration number, or

(b) if that person does not have a registration number, a declaration in a form acceptable to the director.

Contents | Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 5.1 | Part 6 | Part 7 | Part 8 | Part 9 | Schedule 1 | Schedule 2 | Schedule 3 | Schedule 4 | Schedule 5 | Schedule 6