Contractors and sub-contractors must obtain a contract clearance letter from the Ministry of Finance and provide a copy of the letter to the general contractor or principal before the final payment is made on a contract.
A contract clearance ensures the Provincial Sales Tax (PST) has been accounted for correctly before a contract is finalized.
Under Section 29 of The Provincial Sales Tax Act, non-resident contractors consuming or using equipment or other goods during the completion of a contract in Saskatchewan are required to post a guarantee bond or cash deposit in an amount equal to 6% of the total amount to be paid under the contract. Alternatively, contractors may obtain a clearance letter to provide to the principal. Principals should maintain a holdback of 6 per cent until a clearance letter is provided or proof of bonding is obtained.
The principal must ensure that the contractor complies with this provision, as failure to do so can leave the principal liable for any taxes which the contractor fails to remit, in addition to possible fines and penalties.
How to Apply
Apply for a contractor's clearance by completing and submitting the Request for Contract Clearance form.
Non-resident contractors should use the Contract Clearance Supplementary Worksheet to assist them in calculating the tax payable and ensure efficient review and processing of the application.
Ministry of Finance
PO Box 200
Regina, SK S4P 2Z6
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