Changes to the Quebec Sales Tax System
Vol. IV No. 50 • November 1, 2012
WHAT YOU NEED TO KNOW
Changes were announced in September 2011 which would almost harmonize the Quebec Sales Tax (QST)
with the federal Goods and Services Tax/Harmonized Sales Tax (GST/HST) legislation.
These changes go into effect January 1, 2013.
The purpose of this issue is to outline some of these changes and how they will affect
you and your business.
QST WILL NO LONGER BE CHARGED ON THE GTS INCLUDED AMOUNT
SOME CONSEQUIENTIAL CHANGES IN 2013
- The mathematical factor for allowances (mileage, etc.) will increase from 9.5/109.5 to 9.975/109.975.
- The specified percentages and mathematical factor for expense reimbursements will remain unchanged for both large businesses and small and medium-sized businesses.
– Large businesses: 5%
– Small and medium-sized businesses: 9/109
- Commencing on April 1, 2013, all federal and provincial departments and agencies will be required to pay taxes (GST/HST and QST) on the purchase of goods and services. Purchase exemption certificates will no longer apply.
– Consequently, review all government contracts and verify wording in order to be compliant with the new QST legislation.
Some Planning Points to Consider
All businesses in the financial services sector should accelerate purchases of capital property and incur expenses in 2012. For example, a holding corporation currently registered for QST would be able to recover an ITR on a computer purchased in 2012. However, if the same computer were to be purchased in 2013, no ITR would be available.
We are closer to full harmonization, but we are not there yet and may never get there!