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HST/ TDP for British Columbia |
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Market Update November 2011 |
HST/ TDP for British Columbia
TDP – General
Q1: What is the Tax on Designated Property (TDP)?
A1: Effective July 1, 2010, the province of British Columbia introduced the TDP. The TDP is a 12% tax on designated property (boats, aircraft and vehicles). The TDP applies to designated property purchased in British Columbia or, in the case of motor vehicles, brought into the province from another province or territory. The TDP does not apply if the designated property is a taxable supply acquired from a harmonized sales tax (HST) registrant. As a result, no transaction is subject to both HST and TDP.
Q2: Do I collect and remit, on behalf of the purchaser, the TDP in the same way
I did for the PST?
A2: No, you do not collect and remit TDP in the same way as you did for the provincial sales tax. Payment and remittance of the TDP is the purchaser’s responsibility. The purchaser has 23 days following the last day of the month of the boat sale to self-assess and pay the TDP using the form titled: Casual Remittance Return for Tax on Designated Property (FIN 315) available on the Ministry of Finance’s website at: http://www.sbr.gov.bc.ca/documents_library/forms/0315FILL.pdf
Note: The Ministry will be monitoring tax payments in accordance with registered
ownership and will be following up in writing with purchasers who have not
completed their forms and submitted payment.
Q3: I’m confused, when does HST, GST and TDP apply to boat sales?
A3: Effective July 1, 2010, the HST replaced both the goods and services tax and the provincial sales tax in British Columbia. The Federal Canada Revenue Agency administers the HST and it applies on most purchases of taxable supplies of goods and services in British Columbia at a rate of 12%, consisting of the 5% federal portion and a 7% provincial portion. For information on what is and is not a taxable supply for HST purposes, you should contact the Canada Revenue Agency at: 1 800 959 5525.
Also, effective July 1, 2010, boats purchased in British Columbia from a person who is not an HST registrant are subject to a 12% provincial TDP. In other words, TDP applies to sales of vehicles, boats and aircraft that are not taxable supplies or exempt supplies for the purposes of HST. Boats purchased from an HST registrant are not subject to the TDP because they will generally be subject to HST. No transaction is subject to both TDP and HST.
Out-of-Province (OOP) Purchasers
Q4: What is the procedure that must be followed to ensure an out-of-province
buyer (ie. Alberta resident) is exempt from paying the TDP on a used
recreational boat purchased from a BC broker?
A4: If the British Columbia broker is an HST registrant, then the TDP does not apply. However, the HST may apply to the transaction. The HST is administered by the Federal Canada Revenue Agency and they can be contacted at: http://www.cra-arc.gc.ca/ or at 1 800 959 5525.
If an Albertan purchases a boat at a sale outside British Columbia, then TDP does not apply. However, the taxes of another province may apply.
If an Albertan purchases a boat at a sale in British Columbia that is not a taxable supply from an HST registrant, then the boat is only exempt from TDP if:
1. the boat is purchased for use outside British Columbia,
2. after the boat is purchased no use is made of the boat while it is in British Columbia other than to store it and to send it out of British Columbia,
3. the seller sends the boat out of British Columbia, and
4. the purchaser does not take possession of the boat in British Columbia.
Q5: What is required to demonstrate that a transfer of title has been executed
outside of BC?
A5: The preferred protocol for demonstrating transfer of title outside of British Columbia is a written statement that identifies the location and date of the transfer, and the signatures
of the sellers and buyers and/or their representative (i.e., delivery person) at the time
of transfer.
Q6: Does TDP apply at all if a boat is purchased outside of BC and brought in
to BC to do business?
A6: No, if a person purchases a boat at a sale in another province and then brings it into British Columbia on, or after, July 1, 2010, they are not required to pay TDP. Boats and aircraft brought into the province are exempt from TDP. However, the person may be required to pay the provincial component of the harmonized sales tax (HST) depending on the circumstances. The HST is administered by the Federal Canada Revenue Agency and they can be contacted at: http://www.cra-arc.gc.ca/ or at 1 800 959 5525.
If a business purchases a boat in British Columbia from a non-HST registrant, then TDP applies to the sale unless another exemption applies (such as a boat purchased solely for resale or a boat purchased by a commercial fisher).
Q7: Will out of province and out of country purchasers who bring their boats
into BC have to pay any taxes?
A7: TDP does not apply to boats brought into British Columbia from outside the province. However, HST may apply. The HST is administered by the Federal Canada Revenue Agency and they can be contacted at: http://www.cra-arc.gc.ca/ or at 1 800 959 5525.
Marketing Fees
Q8: Does a boat seller have to pay TDP on the marketing fee charged by the
yacht broker to facilitate the sale of the boat (Note: this is not a
consignment sale)?,
A8: No, TDP does not apply to the marketing fee. However, the HST may apply to the fee. The HST is administered by the Federal Canada Revenue Agency and they can be contacted at: http://www.cra-arc.gc.ca/ or at 1 800 959 5525.
HST Registrants
Q9: If a BC company buys a used vessel from a non-HST registered seller does
TDP apply to the sale?
A9: Yes, TDP applies to such a sale. However, certain exemption may apply such as boats purchased solely for resale. For more information please the Ministry of Finance’s bulletin CTR 001, Tax on Designated Property (Vehicles, Boats, and Aircraft), available at: http://www.sbr.gov.bc.ca/documents_library/bulletins/ctr_001.pdf or by contacting the Ministry of Finance at 877 388-4440 or CTBTaxQuestions@gov.bc.ca
Trade-Ins
Q10: How does TDP apply to trade-ins?
A10: If TDP is applicable, the purchaser is required to pay TDP on the difference
between the vessel being purchased and the fair market value of the trade-in.
Greenwood Yacht Services
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#300 - 1212 W Broadway Vancouver, BC V6H 3V1, Canada |
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