2026 Changes for BC PST Rules: What Architects, Engineers, Geoscience Services Need to Know Before October 1
Updated: Sep 1
BC’s PST rules are changing, and for many firms in the built environment, the change may look deceptively small.
In this article, we’ll walk through the key points, practical action steps and planning deadlines to help you prepare before the rules come into effect. It’s not official guidance, but it should give you a practical starting point for your own research and planning alongside your accounting or tax professional.
You should walk away able to answer the following questions:
- Do my services fall under the new rules?
- What adjustments are needed for my invoices?
- What do I need to update before the deadline?
Starting October 1, 2026, the most relevant newly taxable categories are architectural, engineering and geoscience services. The broader list includes accounting, bookkeeping, assurance, security/private investigation, and non-residential real estate services. For the purpose of this article, we will focus on the impacts for architectural and engineering firms.
That does not mean every architect, engineer, contractor, interior designer, or landscape designer suddenly needs to charge PST on every service.
The practical impact depends on several factors. What service are you providing? Who is providing it? Is the work regulated? Where is the project physically located? And how is the work shown on your invoice?
A firm describing itself as a design studio may have taxable architectural work, non-taxable interior design work, and taxable product sales appearing on the same invoice. Another firm may provide engineering services from BC for a project in Alberta, which would not require the additional PST charges. Note, the PST charges are based on where the project physically sits.
This is why we recommend reviewing the changes before October arrives. Leaving changes to your billing system until the last minute could mean unclear invoices, confused clients, missed registration steps, or an accounting system that cannot handle split tax treatment properly.
By the end of this article, you should have a clearer sense of whether your services fall under the new rules, what your invoices may need to show, and what to update before October 1.
What is the new tax rate?
For taxable architectural, engineering, and geoscience services, PST will apply at 7% on 30% percent of the purchase price.
In practical terms, that produces an effective PST amount equal to 2.1% of the taxable professional-service fee.
This distinction is important because firms should not simply apply a standard 7% PST code to the entire invoice.
Situational Example:
Suppose an engineering firm issues a $40,000 invoice. Of that amount, $30,000 relates to taxable design-development work, while $10,000 relates to exempt project-management services.
The PST calculation would apply only to the taxable portion.
Thirty percent of the $30,000 taxable fee is $9,000. Seven percent PST on that amount is $630.
The invoice should make this breakdown understandable. It should separate taxable from exempt services clearly enough that the client, bookkeeper, and reviewer can follow the calculation.
A description such as “professional services for the month” will not provide enough support if the invoice is questioned later.
A clearer invoice might show architectural design, project management, reimbursable expenses, and product sales on separate lines. Each line can then carry the appropriate tax treatment.
Most firms will also need more than one professional-services tax code. At minimum, you may require codes for taxable BC services, exempt services, and work relating to projects outside BC.
Before going live, test more than a simple invoice. Review how the system handles credit notes, deposits, retainers, progress billing, write-offs, and final project reconciliations. Partial tax bases can behave differently across accounting platforms, so a trial run is worthwhile.
Look at what your firm actually does
The new rules focus on certain regulated professional services. For AEC firms, the most relevant categories are architectural services and engineering or geoscience services.
For architectural services, the work generally needs to be performed by someone registered, or required to be registered, with the Architectural Institute of British Columbia (AIBC). The work must also fall within the regulated practice of architecture.
Engineering and geoscience services follow similar logic through Engineers and Geoscientists British Columbia (EGBC).
This means the change is not based solely on your company name, website wording, or the job title shown in an email signature. It is based on the nature of the work and who is responsible for providing it.
An interior designer, contractor, or landscape designer does not automatically fall under these new professional-services rules. However, part of their engagement may still be affected when regulated architectural or engineering work is included.
We often see this in multidisciplinary firms.
Imagine a small studio offering architectural design, interior concepts, furniture procurement, and installation coordination. The firm previously invoiced everything under one line called “professional services.”
Under the new rules, that description is too broad.
For example, the architectural design portion may be taxable while standalone interior design consulting may not be. Furniture sales are already taxable under existing PST rules. Installation services may require separate treatment depending on the circumstances.
The business has not changed, but the invoice now needs to tell a clearer story.
A useful first step is to list every service your firm offers and identify the person or role delivering it. From there, note whether the work is regulated, where the project is located, and whether the service is taxable, exempt, or outside the scope of the new rules.
This review is easier when completed before changing your accounting software. Otherwise, firms can end up building tax codes before deciding how their services should classified.
You will find more detailed guidance on the government of BC website (here for Architects) and (here for Engineers) that references the services generally included, based on the AIBC phases for architects, and ACEC categories of service for engineers.
We cannot stress enough, the importance of completing this prior to the change over. Taking the time to do this now, will save you from future problems with the CRA and/or your clients.
Project location matters more than billing address
The location of the project is another important piece of the puzzle.
A client’s mailing address does not always determine which PST rate applies. The physical location of the property or project is what delineates which rate is charged.
For example, imagine a Vancouver engineering firm working on a commercial building located in Richmond. The developer’s head office is in Alberta, and all invoices are sent there. The Alberta billing address does not necessarily remove the PST obligation because the project itself is located in BC.
Now reverse the situation.
The Vancouver client hires the same engineering firm to work on a facility located in Calgary. That service may be treated differently because the project is physically located outside of BC.
One simple improvement is to add a project jurisdiction field to your onboarding and quoting process. Record the project address, province, and any cross-border allocation at the beginning of the engagement.
This small change can help in preventing someone from trying to reconstruct the project location months later while preparing an invoice or reviewing a PST return.
Timing creates some of the biggest transition risks
The transition period deserves careful attention, particularly for firms with monthly billing, retainers, long-term contracts, or substantial work in progress.
A common assumption is that everything invoiced before September 30 will avoid PST. That is not always correct.
The timing rules consider when an amount is paid or becomes due, along with the period in which the services are provided.
When an amount is paid or becomes due before October 1, and all related services are completed before December 1, PST may not apply. This creates a limited transition window for certain services performed during October and November.
However, services extending into December can change the result. When part of the work is delivered on or after December 1, PST may apply to the portion attributable to services provided from October onward.
Amounts that are invoiced on or after October 1 will have PST owing, even when some of the work was completed earlier.
Consider this: a firm which completes design work during September but waits until October 5 to issue its invoice will fall under the new rules because the amount was invoiced after October 1.
This is why reviewing work in progress before the deadline matters. Firms should look at service periods, invoice dates, contractual due dates, retainers, and upcoming billing cycles together.
The goal is not to rush invoices out without support. It is to understand which work belongs where and avoid discovering the transition rules after the invoice has already been sent.
Registration and filing should be handled before the first taxable invoice
A firm providing taxable architectural, engineering, or geoscience services on or after October 1 will generally need to register to collect and remit PST.
Exceptions may apply when the firm provides only non-taxable or exempt services, or when it qualifies as a small seller.
The small-seller rules are narrower than many businesses expect. Revenue is only part of the test, and maintaining established business premises may affect eligibility. It is worth confirming the exemption rather than assuming a firm qualifies because its taxable sales are modest.
Businesses expecting to issue taxable invoices should register online through eTaxBC before October 1. Registration is best treated as part of the setup process, not something to address after the first invoice goes out.
Electronic filing and payment will also be mandatory for businesses selling these newly taxable professional services.
Internally, decide who will prepare the PST return, who will review it, and who will authorize payment. Confirm that the correct team members have eTaxBC access and that banking information is ready.
Avoid leaving the entire process tied to one employee’s email address or login. Small firms are especially vulnerable when compliance knowledge sits with only one person.
It is also worth remembering that PST collected may need to be remitted before the client has paid the invoice. That can create a cash-flow issue when receivables are slow, so billing and collection routines still matter.
A few details that are easy to miss
Disbursements deserve attention. Many costs recovered from clients form part of the taxable service price. Services such as actual travel, accommodation, and meal costs are treated differently when they are passed on to the client at a reasonable amount.
Markups and flat administration charges can affect the PST rate. A general “expense recovery” line will not receive the same treatment as a clearly documented reimbursement.
Subconsultants also require proper records.
Architectural, engineering, or geoscience services purchased solely for resale may qualify for an exemption at the subcontractor level. The firm reselling the service may then need to charge PST to the final client when the overall service is taxable.
That treatment depends on supporting documentation. Firms should confirm what exemption certificate or PST information is required before invoices begin moving between consultants.
Bundled services are another common trouble spot. When taxable and exempt work is sold together, the business may need to allocate the total fee using fair market value.
The allocation should be reasonable, consistent, and supported by the scope of work. It should not be created after the fact simply to produce a preferred tax result.
What to review before October 1
We suggest tackling the preparation work in stages.
First stage, review your service list, team credentials, project phases, project locations, and subconsultant arrangements. Identify which services are taxable, exempt, or outside the new rules.
Second stage, confirm whether registration is required and set up the appropriate tax codes inside your accounting and invoicing systems.
Third stage, we recommend you test several real invoice scenarios. Include mixed services, retainers, reimbursable costs, credit notes, and projects spanning the implementation date.
This is also the time to review contracts and explain the change to clients. A short note before October is usually easier than answering questions after an unfamiliar tax amount appears on an invoice.
The firms that handle this transition well will not necessarily have the most advanced software. They will have clear service definitions, accurate project information, and a billing process their team understands.
The new rules are detailed, but the preparation does not need to become overwhelming. Start by mapping what services your firm provides. Then connect those services to the correct project, invoice, and tax treatment.
That groundwork will make the transition much easier for your team and your clients.
Things to consider:
Bill WIP in full by 30-Sept with no PST. Any WIP billed on or after October 1 must include PST, even if the work was completed before September 30.
There’s a two-month transition period for pre-billed work. Services pre-billed for work completed in October or November 2026 may be exempt from PST. Any services pre-billed for December 2026 or later must include PST.
Document subconsultants, resale and bundled services clearly. Architectural, engineering and geoscience services purchased solely for resale may be PST-exempt when purchased. However, the firm reselling those services must charge PST to its client if the final service is taxable.
Watch the transitional rules for September, October and November invoices. This is especially important for retainers, monthly or progress billing, and long-term contracts:
If an invoice is paid or due before October 1, 2026, PST depends on when the services are provided.
If all services are completed before December 1, 2026, PST does not apply.
If any services are provided on or after December 1, PST applies to the portion relating to services provided on or after October 1.
If payment is due on or after October 1, PST generally applies regardless of when the work was completed, unless an exemption applies.
Before sending September and October invoices, review your contract dates, billing dates and WIP. Pay particular attention to invoices that cover work across October, November and December.
BC’s full guidance is available here: https://www2.gov.bc.ca/gov/content/taxes/sales-taxes/pst/publications/architectural-services
Disclaimer
This article is for general information only and is not official tax, accounting, legal, or financial advice. PST obligations can vary by firm, service type, project, contract, and billing structure. Use this article as a starting point for your own research and consult a qualified accounting, finance, or tax professional before changing your invoicing, registration, or compliance process.
Key resources to check out:
BONUS!
Download and use this helpful guide for making sure you and your firm are ready for the new PST rules.
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