In June 2025, the B.C. Ministry of Finance updated PST Bulletins 105 (Software) and 107 (Telecommunication Services/Cloud Computing) to clarify that cloud-based services, including Software as a Service (SaaS), Infrastructure as a Service (IaaS), APIs, and related online services, are now considered taxable software under the Provincial Sales Tax (PST) retroactive to April 1, 2013.
These updates follow the 2023 Hootsuite Inc. v. British Columbia decision and provide legal clarity on how PST applies to modern digital services.
Key Changes – Effective June 2025
PST Bulletin 105 – Software
- Expanded Definition: PST now applies to:
- SaaS and IaaS
- APIs and online databases
- Online data processing and storage
- Taxable Access: PST applies regardless of how software is delivered (downloaded, hosted, or accessed remotely).
- Still Taxable: Sales, leases, modifications, or licensing of software (including via cloud).
- Bundled Sales: PST applies to the software portion when bundled with hardware or services.
- New Additions:
- Clarification that services to software are exempt if no software is supplied
- New guidance on prepaid purchase cards and incidental software
- Rules for online marketplace facilitators
PST Bulletin 107 – Telecommunication Services & Cloud Computing
- Cloud = Software: Hosting services, data backup, and cloud platforms now explicitly fall under the software definition and are taxable when accessed in B.C.
- APIs and Remote Access: Taxable under the new software rules.
- Digital Content: Streaming and telecom-based digital content is taxable when accessed on devices located in B.C.
- Mobile Devices: Updated criteria for determining if a device is “ordinarily situated” in B.C. for tax purposes.
PST Applicability Summary
| Scenario | PST Applies? |
| SaaS or IaaS accessed in B.C. | Yes |
| APIs and cloud-hosted data processing | Yes |
| Software downloaded or licensed | Yes |
| Online storage, backup, or web hosting | Yes |
| Remote software access (previously exempt) | Yes (now taxable) |
| Software consulting, design, or installation | No |
What This Means for Businesses
- Retroactive Impact: Businesses may need to self-assess PST on past use of taxable digital services.
- Registration & Compliance: Vendors providing cloud-based or remote-access services in B.C. must ensure PST registration, collection, and remittance.
- Review Contracts & Systems: Businesses using or selling software and cloud services should review contracts, invoicing practices, and tax compliance systems.
- Exemptions Unchanged: Services without software delivery (e.g. design, consulting) remain non-taxable.
Contact Us
Mitchel Soltys
+1 416 410-0374 Ext 2227 | msoltys@stratossolutions.com