Vancouver’s additional 2.5% hotel tax will increase the overall rate to above the 12% specified rate, thereby causing GST to be applied to the 13.5% provincial tax
From February 1, 2023, until January 31, 2030 (effective period), the Major Events Municipal and Regional District Tax (Major Events MRDT) of 2.5% will apply to supplies of short-term accommodation made in the City of Vancouver … in addition to the 8% provincial sales tax (PST) and the 3% Vancouver Municipal and Regional District Tax (MRDT) … .
For purposes of section 154 … the specified tax rate in BC is 12%. … [D]uring the effective period, the combined tax rate of 13.5% (PST at 8% plus MRDT at 3% plus Major Events MRDT at 2.5%) on supplies of short-term accommodation in Vancouver exceeds BC’s specified tax rate of 12%. Therefore, for all taxable supplies of short-term accommodation made in Vancouver during the effective period, the GST will be calculated on the total value of the consideration paid or payable for the accommodation, including the amount of the PST, the MRDT, and the Major Events MRDT.
