Application of PST to Legal Fees

You are required to charge and collect the 7% PST on all fees charged for legal services except for:

  1. Legal Aid
    Legal services provided to an individual are exempt from PST if they are at least partly paid for by the Legal Services Society or by a funded agency within the meaning of the Legal Services Society Act.
  2. Legal Services Provided Under Contract
    Legal services are exempt from PST if the legal services are provided to a law firm or notary firm if all of the following criteria are met:
    1. The legal services are provided by:
      • an individual who is employed solely by the law firm or notary firm under a contract for services or as an associate, but who is not an employee for the purposes of the Income Tax Act (Canada), or
      • a corporation that is providing services solely to the law firm or notary firm under a contract for services, and
    2. ​The purchase price of the legal services to the law firm or notary firm is recovered directly in its sale price of the legal services to their client, in respect of whom the legal services are provided.
  3. Legal Services Provided to First Nations
    Legal services purchased by a First Nation individual or a First Nation band are exempt from PST if the legal services relate to real property situated on First Nation land, or are performed on First Nation land.
    The exemption does not extend to tribal councils, band empowered entities, corporations or cooperatives.
    For more information on exempt sales to First Nations individuals and First Nations bands, please see Bulletin PST 314, First Nations Legal Services.
  4. First Nation Negotiations
    Legal services purchased by an aboriginal organization representing the interests of Indians and bands under the Indian Act (Canada) are exempt from PST if the legal services relate to any of the following:
    1. Aboriginal treaty or land claims negotiations
    2. Consultations with the provincial or federal governments in relation to aboriginal rights or aboriginal title, or in relation to interim agreements that relate to aboriginal rights or aboriginal title
    3. Negotiations that relate to existing treaties or treaty rights
    4. Negotiations with other aboriginal organizations in relation to overlapping treaty or land claims
  5. Legal Services Provided to a Related Corporation
    Corporations are exempt from PST in relation to legal services provided to that corporation by an employee of a related corporation.
    For more information, please see Bulletin PST 210, Related Party Asset Transfers.
  6. Members of the Diplomatic and Consular Corps
    Legal services purchased by certain members of the diplomatic and consular corps are exempt from PST if the purchaser holds a valid diplomatic or consular identity card issued by the Department of Foreign Affairs and International Trade of the Government of Canada.

 

Legal Services Provided to Clients Not Resident in BC

If you provide legal services in British Columbia to a client who neither resides nor carries on business in British Columbia, then you may still need to charge PST if the services relate to British Columbia.  The most common examples would include legal services that relate to real property located in British Columbia or legal services related to litigation commenced in British Columbia.  There must be a connection to British Columbia.