BC Approves PST Exemptions For New LNG Facility
November 15, 2018 Andrew AdolphNews,LNG,PST
New LNG Facility To Receive PST Exemptions
It’s not every day the government provides a blanket exemption from sales tax for a particular company or a specific activity. But that changed on October 2, 2018, after LNG Canada announced plans to build a $40 billion terminal at Prince Rupert.
Shortly after that, the BC Government promised PST exemptions for goods to be used during the project’s construction.
Not only is this excellent news for the Prince Rupert economy, but it also means anybody involved in building the project can get a PST refund or exemption for goods purchased for use in the project.
What Goods Are Exempt From PST?
PST exemptions apply to goods primarily used for LNG’s project, with “primarily” defined as 50% or more. Moreover, the acquired goods do NOT need to be used on-site.
Goods will qualify for the exemption so long as they are used primarily for one of LNG’s project activities.
LNG Project Activities Eligible For PST Exemptions
Thanks to the government’s measure, the following activities will qualify for PST exemptions:
- LNG facility construction
- Equipping the LNG facility for operation
- Building anchorages, berthing facilities, and navigational aids for the tankers
- Constructing the adjacent wharf, known as the Terminal A extension
- Environmental measures to mitigate effects on fish and wildlife habitats.
However, the new rules will not apply to the pipeline itself, except for the portion used to load the gas for shipment or transmit LNG for re-gasification. Pig traps are also ineligible.
How The LNG PST Exemption Works
The exemptions available are retroactive to October 2, 2018. They will run until October 2, 2025, or the date when at least two of the liquefaction trains are running, whichever is later.
Anybody involved in the project can obtain goods PST exempt when they are for the primary purposes of the project. Bulletin212 provides several examples of the primary-use test.
You do not need a PST number to qualify for an exemption.
There are two ways to receive the exemption:
- From your supplier: You must provide your supplier with a Certificate of Exemption, Form FIN 495, which you can download by clicking the link. If you repeatedly purchase goods for the LNG project, you can create a standing exemption on file with that supplier. However, this only applies as long as you satisfy all other conditions.
- Filing a refund claim: Did you pay PST to your supplier but qualify for the exemption? If, for some reason, your supplier can’t refund you within six months of the purchase, file a refund claim with the provincial government using Form FIN 355.
Andrew Adolph is a CPA and former CRA auditor with 25 Years of experience. He helps businesses to not par any more in sales taxs than the law says they must and acts as an advocate for you if you are being audited, so you can fous on your business.