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Quebec Harmonized Sales Tax (Amended QST)

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Sales Taxes -> 
    GST/HST -> QC Amended QST

Quebec Harmonized Sales Tax (Amended QST)

On September 30, 2011 Canada and Quebec signed a Memorandum of Agreement (MOA) regarding the harmonization of the Quebec Sales Tax (QST) with the Goods and Services Tax (GST).  The agreement reflects a commitment by both parties to negotiate a Canada-Quebec Comprehensive Integrated Tax Coordination Agreement (CITCA), which would set out the terms of the harmonization.

The current GST rate is 5%.  The current QST rate is 9.975%, since January 1, 2013.  See our Sales Tax Rates page.

Some key components of the MOA:

bulletQuebec will continue, generally, to administer the QST and the GST/HST in Quebec, and the QST will continue to be legislated by Quebec.
bulletThe implementation date for the Amended QST was January 1, 2013.
bulletThe tax rules and tax bases for GST and QST are now harmonized, which will make things much easier for businesses.
bulletQuebec will undertake to discontinue charging QST on the GST (tax on tax).
bulletQuebec may increase or decrease the QST rate.
bulletCanada will make payments totalling $2.2 billion to Quebec, with $733 million of this paid on the first business day following implementation date, and the remaining $1,467 million one year later, provided the Amended QST continues to remain in place.
bulletQuebec undertakes to mirror under the QST legislation the place of supply rules under the GST/HST legislation, and the rules in respect of financial services and financial institutions under the GST/HST legislation.

Quebec has certain measures under the QST that currently deviate from the GST/HST, and may continue to deviate.  These measures are:

bulletAdministrative measures under Quebec’s Tax Administration Act.
bulletZero-rating of motor vehicles acquired for re-supply and collection of the QST at the retail level by the Societe de l'assurance automobile du Quebec.
bulletAnti-avoidance rule for the purposes of calculating the QST payable regarding a used road vehicle.
bulletMeasures applicable to the operators of flea markets.
bulletMeasures applicable to clothing manufacturers.
bulletMeasures applicable to the operators of establishments providing restaurant services.
bulletMandatory registration of certain small suppliers and of certain persons not residing in Quebec and not carrying on a business there.
bulletThe application of the tax to road vehicles supplied otherwise than in the course of commercial activities.
bulletThe compensation to the municipalities of Laval, Montreal and Quebec for the repeal of the amusement tax. 

The Amended QST base may deviate from the GST/HST base provided that the absolute value of the deviations does not exceed 5% of the estimated GST base for Quebec.  There are certain measures already implemented by Quebec, which represent a deviation 3% of the estimated GST base.  These measures are:

bulletZero-rating of tobacco.
bulletZero-rating of books.
bulletZero-rating of diapers for children and items used for bottle-feeding or breast-feeding.
bulletZero-rating of admission to a non-foreign convention sold by the convention sponsor to a non-resident participant.
bulletZero-rating of passenger transportation services from Quebec to another province with transfer to another conveyance outside Canada.
bulletZero-rating of inter-provincial services of ferrying by watercraft of motor vehicles and passengers between parts of a road or highway system separated by a stretch of water.
bulletZero-rating of inter-provincial air ambulance services.
bulletTransitional exemptions for the Mohawks of Kahnawake.
bulletNon-taxation of certain properties and services supplied by municipalities due to the fact that these inputs were not eligible for any rebate.
bulletRebate of the tax paid by certain international organizations.
bulletRebate of the tax paid regarding automatic door openers for handicapped persons.
bulletRebate of the tax paid regarding a pleasure boat temporarily brought into Quebec for winter storage.
bulletTaxation by self-assessment of food products intended for making wine or beer.
bulletNon-rebate of the tax paid regarding short-term accommodations or camping accommodations included in a tour package.
bulletEasing of the self-supply rule for a single unit residential complex or a residential unit held in co-ownership.

Department of Finance information:

    - Memorandum of Agreement Concerning a Canada-Quebec Comprehensive Integrated Tax Coordination Agreement

Revised: September 19, 2017

 

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