NEWS FROM THE FIELD
NEWS FROM THE FIELD
Think BIG’s newest column shares news from around the world that SHCA members need to know about
Ministry of Finance
accepts ACEC-SK’s
arguments concerning
PST-chargeable
engineering services
In mid-June, the Ministry of Finance
advised the Association of Consulting
Engineering Companies – Saskatchewan
(ACEC-SK) it accepted the association’s
arguments against significant changes rel-ative
to which engineering services should
be PST-chargeable. Here is what we cur-rently
know.
Two important changes will be the new
application of PST to construction manage-ment
services and computer services pro-vided
by engineering companies. Therefore,
the full 6 per cent PST will now be charge-able
on the following:
• For engineering, procurement and
construction (EPC) contracts, the
new definition will clarify that
PST applies in full to construction
management services, if provided in
relation to a construction contract,
GOLDEN BROWN / SHUTTERSTOCK.COM
including an EPC contract, and
otherwise taxable pursuant to sub-clause
3(1)(k)(vii) or (xix) of the Act.
• For computer services, the new definition
will specify that PST applies in full to
services related to designing software or
systems, or any other computer service
described as a computer service.
The application of PST to “engineering
services” will essentially remain status quo
per the defined categories in ACEC-SK’s
Recommended Schedule of Fees, as follows:
• Professional engineering services
in the category of design services
(Category 3) remain taxable based
on a formula that applies PST to 30
per cent of the taxable charges.
• Professional engineering services in
other categories in the Fee Schedule will
remain exempt from PST, including:
a. Category 1 – Consultative
and advisory services
b. Category 2 – Pre-design services
c. Categories 4 & 5 – General
engineering or geoscience services
during construction or field
projects, resident engineering
or geoscience services during
construction or field projects,
geological or geophysical
services of defined scope, and
geological or geophysical services
on comprehensive projects
It is critical to note that where a vendor
fails to differentiate the engineering servic-es
that are taxable at 30 per cent from other
services, PST will apply to the total amount
shown on the invoice. The onus will be on
engineering firms to clearly differentiate for
which service(s) they are invoicing.
ACEC-SK will be offering education-al
sessions over the coming months to
help members understand the differences
among such things as: contract adminis-tration,
construction administration, EPC
and EPCM. Ensuring you are clear about
the differences among these services will
help you make more informed future de-cisions
to navigate Saskatchewan’s taxa-tion
system.
saskheavy.ca | Quarter 3 2017 | Think BIG 9