Revenu Québec Infos

The tax measure providing for a ten-year exemption from the contribution to the health services fund for a corporation or partnership that operates a business carrying out a major investment project has been eliminated. However, a corporation or a partnership that held, on November 20, 2012, an initial qualification certificate from the Ministère des Finances et de l'Économie and that held, for the year, an annual qualification certificate from the Ministère may continue to be eligible for this exemption under the previous terms and conditions.

Starting this year, all employers will receive the new, streamlined Employer's Kit (including form RLZ-1.S-V, Summary of Source Deductions and Employer Contributions) by mail.

As of mid-November, employers can consult the Employer's Kit on our website to obtain all the up-to-date information they need to fulfil their obligations. The online Employer's Kit contains all the online services and documents necessary to file RL-1 slips and the RL-1 summary, and calculate source deductions and employer contributions.

The guides and the source deduction and employer contribution tables can no longer be ordered. These documents are only available on our website.

The value of the benefit from amounts paid by an employer to acquire, on behalf of an employee, a share or fraction of a share issued by the Fonds de solidarité FTQ or by Fondaction, le Fonds de développement de la Confédération des syndicats nationaux pour la coopération et l'emploi, after December 31, 2012, is no longer subject to Québec Pension Plan (QPP) contributions, the contribution to the health services fund, the contribution to the financing of the Commission des normes du travail (CNT) and the contribution to the Workforce Skills Development and Recognition Fund (WSDRF). The benefit constitutes a benefit in kind that is not subject to Québec parental insurance plan (QPIP) premiums. You must include the value of the benefit in boxes A and L of the RL-1 slip.

Even if you are not required to withhold or remit QPP contributions, this benefit represents pensionable salary for the employee. You must therefore enter "G-1" in a blank box of the RL-1 slip, followed by the amount of the benefit. Consequently, the employee who has not reached his or her maximum QPP contribution for the year may make an optional contribution to the QPP on this amount when filing his or her income tax return.

A temporary refundable tax credit for eco-friendly home renovation has been introduced.

The tax credit is intended for individuals who have a qualified contractor carry out eco-friendly renovation work on their principal place of residence or cottage under a contract entered into after October 7, 2013, and before November 1, 2014.

The amount of the tax credit corresponds to 20% of the portion of an individual's eligible expenses that exceeds $2,500, up to a maximum tax credit of $10,000 per eligible dwelling.

To qualify for the tax credit, the work must have a positive environmental impact or improve the dwelling's energy efficiency, and the materials and appliances involved must meet recognized environmental and energy standards.

The contractor that carried out the work must certify that those standards are met by completing and signing form TP-1029.ER.A-V, Certificate of Compliance With Energy and Environmental Standards, and giving it to the individual for whom the work was done.

The various types of recognized eco-friendly renovation work are listed below.

For more information, contact us.

Recognized eco-friendly renovation work A. Work relating to the envelope of the dwelling A1 Insulation of the roof, exterior walls, foundations and exposed floors

• The insulation materials used for insulation must not contain urea formaldehyde or they must have low levels of volatile organic compounds (VOC) certified GREENGUARD or EcoLogo environmental choice. In addition, the insulating value must satisfy the following standards:
  • insulation of the attic: the insulating value achieved must be at least R-41 (RSI 7.22);
  • insulation of the flat roof or cathedral ceiling: the insulating value achieved must be at least R-28 (RSI 4.93);
  • insulation of the exterior walls: the increase in the insulating value must be at least R-3.8 (RSI 0.67);
  • insulation of the basement (including the header area): for the walls, the insulating value achieved must be at least R-17 (RSI 3.0), while for the header area, the insulating value achieved must be at least R-20 (RSI 3.52);
  • insulation of the crawl space (including the header area): for the exterior walls (including header area), the insulating value achieved must be at least R-17 (RSI 3.0), while for the floor area above the crawl space, the insulating value achieved must be at least R-24 (RSI 4.23);
  • insulation of exposed floors: the insulating value achieved must be at least R-29.5 (RSI 5.20).

A2 Sealing

• Water-proof sealing of the foundations.
• Air sealing of the envelope of the dwelling or of a portion of it (walls, doors, windows, skylights, etc.).

A3 Installation of doors or windows

• Replacement or addition of doors, windows and skylights with ENERGY STAR qualified models for the climate zone where the dwelling is located.

B. Work relating to the mechanical systems of the dwelling B1 Heating system

• Replacement of a propane or natural gas heating system appliance with one of the following appliances using the same fuel:
  • an ENERGY STAR qualified furnace with an annual fuel utilization efficiency (AFUE) of at least 95% and equipped with a brushless direct current (DC) motor;
  • a zero-clearance furnace with an AFUE of at least 95%, if the dwelling is a mobile home;
  • an ENERGY STAR qualified boiler with an AFUE of at least 95%.
• Replacement of an indoor wood-burning system or appliance with one of the following:
  • an indoor wood-burning system or appliance that complies with the CSA-B415.1-10 standard or the 40 CFR Part 60 Subpart AAA standard of the Environmental Protection Agency (EPA) of the United States on wood-burning appliances. However, appliances not tested by the EPA are not eligible unless they have been certified under the CSA-B415.1-10 standard;
  • an indoor pellet-burning appliance (including stoves, furnaces and boilers that burn wood, corn, grain or cherry pits);
  • an indoor masonry heater.
• Replacement of a solid fuel-fired outdoor boiler with an outdoor wood-burning heating system that complies with the CAN/CSA-B415.1 standard or the Outdoor Wood-fired Hydronic Heater program of the Environmental Protection Agency (EPA) (OWHH Method 28, phase 1 or 2), provided the capacity of the new system is equal to or smaller than the capacity of the one it replaces.
• Installation of an ENERGY STAR qualified central split or ductless mini-split air-source heat pump including an outdoor unit and at least one indoor head per floor (excluding the basement) that has an Air-Conditioning, Heating, and Refrigeration Institute (AHRI) number and satisfies the following minimum requirements:
  • a Seasonal Energy Efficiency Ratio (SEER) of 14.5;
  • an Energy Efficiency Ratio (EER) of 12.0;
  • a Heating Seasonal Performance Factor (HSPF) of 7.1 for region V;
  • a heating capacity of 12 000 Btu/h.
• Installation of a geothermal system certified by the Canadian GeoExchange Coalition (CGC). A CGC-certified company must install the heat pump in accordance with the CAN/CSA-C448 standard. The CGC must also certify the system after installation.
• Replacement of the heat pump of an existing geothermal system. A company certified by the Canadian GeoExchange Coalition (CGC) must install the heat pump in accordance with the CAN/CSA-C448 standard.
• Replacement of a heating oil system with a system using propane or natural gas or replacement of a propane heating system with a system using natural gas, provided the new system uses one of the following heating appliances:
  • an ENERGY STAR qualified furnace with an annual fuel utilization efficiency (AFUE) of at least 95% and equipped with a brushless direct current (DC) motor;
  • a zero-clearance furnace with an AFUE of at least 95%, if the dwelling is a mobile home;
  • an ENERGY STAR qualified boiler with an AFUE of at least 95%.
• Replacement of a heating oil, propane or natural gas system with a system using electricity.
• Replacement of a heating oil, propane, natural gas or electricity system with a qualified integrated mechanical system (IMS) that is CSA-P.10-07 certified and achieves the premium performance rating.(1)
• Installation of solar thermal panels that comply with the CAN/CSA-F379 standard.
• Installation of combined photovoltaic-thermal solar panels that comply with the CAN/CSA-C61215-08 and CAN/CSA-F379 standards.

B2 Cooling system

• Replacement of a window air-conditioning unit or central air-conditioning system with an ENERGY STAR qualified central split or ductless mini-split air-conditioning system including an outdoor unit and at least one indoor head per floor (excluding the basement), provided the appliance has an Air-Conditioning, Heating, and Refrigeration Institute (AHRI) number and satisfies the following minimum requirements:
  • a Seasonal Energy Efficiency Ratio (SEER) of 14.5;
  • an Energy Efficiency Ratio (EER) of 12.0.
• Replacement of a central air-conditioning system with an ENERGY STAR qualified central split or ductless mini-split air-source heat pump including an outdoor unit and at least one indoor head per floor (excluding the basement) that has an Air-Conditioning, Heating, and Refrigeration Institute (AHRI) number and satisfies the following minimum requirements:
  • a Seasonal Energy Efficiency Ratio (SEER) of 14.5;
  • an Energy Efficiency Ratio (EER) of 12.0;
  • a Heating Seasonal Performance Factor (HSPF) of 7.1 for region V;
  • a heating capacity of 12 000 Btu/h.

B3 Hot water system

• Replacement of a propane or natural gas water heater with one of the following appliances using the same fuel:
  • an ENERGY STAR qualified instantaneous water heater that has an energy factor (EF) of at least 0.82;
  • an ENERGY STAR qualified instantaneous condensing water heater that has an EF of at least 0.90;
  • a condensing storage-type water heater that has a thermal efficiency of at least 95%.
• Replacement of an oil-fired water heater with a water heater using propane or natural gas or replacement of a propane-fired water heater with a water heater using natural gas, provided the new water heater is one of the following:
  • an ENERGY STAR qualified instantaneous water heater that has an energy factor (EF) of at least 0.82;
  • an ENERGY STAR qualified instantaneous condensing water heater that has an EF of at least 0.90;
  • a condensing storage-type water heater that has a thermal efficiency of at least 95%.
• Replacement of a heating oil, propane or natural gas water heater with a water heater using electricity.
• Installation of a solar hot water system that provides a minimum energy contribution of seven gigajoules per year (GJ/yr) and is CAN/CSA-F379 certified, provided such system appears on the CanmetENERGY Performance Directory of Solar Domestic Hot Water Systems.
• Installation of a drain-water heat recovery system.
• Installation of solar thermal panels that comply with the CAN/CSA-F379 standard.
• Installation of combined photovoltaic-thermal solar panels that comply with the CAN/CSA-C61215-08 and CAN/CSA-F379 standards.

B4 Ventilation system

• Installation of an ENERGY STAR qualified heat recovery ventilator or energy-recovery ventilator certified by the Home Ventilating Institute (HVI) and listed in Section 3 of their product directory (Certified Home Ventilating Products Directory). In addition, where installation makes it possible to replace an older ventilator, the new appliance must be more efficient than the older one.

C.   Water conservation and quality

• Installation of an underground rain water recovery tank.
• Construction, renovation, modification or rebuilding of a system for the discharge, collection and disposal of waste water, toilet effluents or grey water in accordance with the Regulation respecting waste water disposal systems for isolated dwellings.(2)
• Restoration of a buffer strip in accordance with the requirements of the Protection Policy for Lakeshores, Riverbanks, Littoral Zones and Floodplains.(3)

D. Soil quality

• Decontamination of fuel oil-contaminated soil in accordance with the requirements of the Soil Protection and Contaminated Sites Rehabilitation Policy.(4)

E. Other

• Construction of a green roof.(5)
• Installation of photovoltaic solar panels that comply with the CAN/CSA-C61215-08 standard.
• Installation of a domestic wind turbine that complies with the CAN/CSA-C61400-2-08 standard.

(1) This system encompasses the domestic heating, ventilation and heat recovery functions.

(2) CQLR, chapter Q-2, r. 22.

(3) CQLR, chapter Q-2, r. 35. This policy is applied in accordance with municipal zoning and urban planning bylaws.

(4) This policy is published by Les Publications du Québec and is available on the Ministère du Développement durable, de l'Environnement, de la Faune et des Parcs website at www.mddefp.gouv.qc.ca/sol/terrains/politique-en/.

(5) For greater clarity, a green roof is a roof that is fully or partially covered with vegetation and that includes a waterproof membrane, a drainage membrane and a growth medium to protect the roof and host vegetation.

Where a merchant or dealer registered for the goods and services tax (GST) and the Québec sales tax (QST) is selling or leasing tangible personal or corporeal movable property and accepts pre-owned tangible personal or corporeal movable property as full or partial payment of the transaction, the credit the merchant or dealer grants for the property traded in may, under certain circumstances, reduce the amount on which the GST and QST in respect of the sale or lease of the property are calculated.

Often called the "trade-in rule," this rule applies, for example, where a used road vehicle is given to a car dealer by a person acquiring a new vehicle.

Under the Comprehensive Integrated Tax Coordination Agreement Between the Government of Canada and the Government of Québec, the Québec government generally agreed that, effective January 1, 2013, results under the QST system would be identical to those under the GST/HST system.

Since that date, the trade-in rule has been applicable only where the person acquiring property by way of sale or lease is the owner of the property traded in. That condition must be met in order for the GST and QST in respect of the sale or lease of the property to be calculated on a reduced amount.

Every non-profit corporation must file with us a duly completed information and income tax return, or income tax return, along with its complete financial statements, on or before the day that is six months after the end of the corporation's taxation year.

An information and income tax return for non-profit corporations (form CO-17.SP, Déclaration de revenus et de renseignements des sociétés sans but lucratif) must be completed if the corporation is exempt from income tax and

• is not claiming any refundable tax credits, or
• is not subject to any other tax under the Taxation Act.

That return is the means by which such a corporation can meet its obligations

• to file an income tax return as a corporation;
• to file an information return as a tax-exempt corporation; and
• to pay the annual registration fee due under the Act respecting the legal publicity of enterprises.

A corporation income tax return (form CO-17, Déclaration de revenus des sociétés) and, where applicable, an information return for tax-exempt entities (form TP-997.1, Déclaration de renseignements des entités exonérées d'impôt) must be completed if the corporation

• is exempt from income tax and is claiming one or more refundable tax credits;
• is exempt from income tax but is subject to one or more other taxes under the Taxation Act; or
• is not tax-exempt.

If the principal object of a non-profit corporation is to provide recreational, sports or dining facilities to its members, an inter vivos trust is considered to have been created. In that case, the corporation must also file a trust income tax return (form TP-646, Déclaration de revenus des fiducies) within 90 days after the end of the calendar year.

For more information, click Non-Profit Organizations.

Large businesses will no longer be able to use the simplified method for large businesses (LB simplified method) to calculate an input tax refund (ITR) in respect of expenses incurred by and allowances paid to employees on or after January 1, 2014.

As of that date, the factor method used to claim an input tax credit under the GST system may be used under the QST system by small, medium-sized and large businesses. The latter will have to take into account the ITR restrictions applicable to large businesses. The method will be known as the "QST factor method."

For more information about the factor method used under the GST system, see the Canada Revenue Agency's GST/HST Memorandum 9.4, Reimbursements.

QST factor method Expense reimbursements

Under certain circumstances, an employer who reimburses an expense incurred by an employee on or after January 1, 2014, will be able to claim an ITR calculated using either the actual amount of QST paid or the QST factor method. For more information about those circumstances, see the brochure entitled General Information Concerning the QST and the GST/HST (IN-203-V).

The following are some aspects of the QST factor method:

• The factor applicable to a reimbursement will be 9/109.
• At least 90% of the expenses reimbursed will have to be expenses relating to taxable supplies, other than zero-rated supplies, of property or services acquired by an employee in Québec.
• Small and medium-sized businesses will be subject to a limit on entertainment expenses varying between 1.25% and 2% of their gross revenue.
• Large businesses will have to respect the ITR restrictions that apply specifically to them, for example, regarding expenses related to the use of road vehicles weighing less than 3,000 kilograms and the fuel used to power the engines of such vehicles, as well as certain food, beverage and entertainment expenses.

Revenu Québec will grant persons who use the QST factor method the same exemption from documentary requirements as is granted by the Canada Revenue Agency. For more information, see GST/HST Memorandum 8.4, Documentary Requirements for Claiming Input Tax Credits.

Expense allowances

The QST factor method will not apply to the calculation of an ITR in respect of an expense allowance. Therefore, an ITR equal to 9.975/109.975 of the allowance may be claimed, under certain conditions, in respect of an allowance paid on or after January 1, 2014. For more information about the conditions, see the brochure entitled General Information Concerning the QST and the GST/HST (IN-203-V).

The tables below summarize the principal ITRs that businesses may claim in respect of expenses incurred by and allowances paid to employees on or after January 1, 2014.

ITRs in respect of reimbursements of expenses incurred on or after January 1, 2014, based on the calculation method Examples of categories Large businesses Small and medium-sized businesses Actual amount of QST paid QST factor method Actual amount of QST paid QST factor method Meals No ITR (restriction applicable to large businesses) No ITR (restriction applicable to large businesses) QST paid subject to any restrictions that may apply
9/109 of the reimbursement subject to any restrictions that may apply Lodging QST paid 9/109 of the reimbursement QST paid 9/109 of the reimbursement Transportation (train, bus, airplane) QST paid 9/109 of the reimbursement QST paid 9/109 of the reimbursement ITRs in respect of expense allowances paid on or after January 1, 2014 Examples of categories Large businesses Small and medium-sized businesses Meals No ITR (restriction applicable to large businesses)
9.975/109.975 of the allowance subject to any restrictions that may apply Kilometres travelled No ITR (restriction applicable to large businesses)
9.975/109.975 of the allowance Lodging 9.975/109.975 of the allowance 9.975/109.975 of the allowance Transportation (train, bus, airplane) 9.975/109.975 of the allowance 9.975/109.975 of the allowance

If you operate a hotel establishment, tourist home, bed and breakfast establishment, hospitality village or another sleeping-accommodation establishment such as a rooming house, then you should take note of the information below about the application of the GST, the QST and the tax on lodging.

GST and QST

You must register for the GST/HST and QST if the total taxable worldwide supplies (This link will open a new window) you made in a given calendar quarter or in the four-quarter period that precedes a given calendar quarter, including supplies made by your associates, is greater than $30,000.

If this is your situation, you must collect the GST and QST and remit them to us using the GST/HST-QST Return (form FPZ-500-V). You can also recover the taxes you pay on the purchase of goods and services that you use in the operation of your business by claiming input tax credits (ITCs) under the GST/HST system and input tax refunds (ITRs) under the QST system.

However, if the total taxable worldwide supplies you made in a given calendar quarter or in the four-quarter period that precedes a given calendar quarter does not exceed $30,000, you are considered a small supplier. As a small supplier, you are not required to register for the GST/HST or QST. If you do not register for the GST/HST and QST, you are not required to collect or remit the GST/HST or QST and you cannot claim ITCs or ITRs for the GST/HST or QST you pay on your purchases.

Tax on lodging

If you operate an establishment in a region where the tax on lodging applies, you must register for that tax, regardless of your total taxable supplies. You need only register once for all your establishments, even if you operate establishments in more than one tourism region in which the tax on lodging applies. However, upon registration, you must indicate where each of your establishments is located.

The tax on lodging must be collected every time an accommodation unit (This link will open a new window) is supplied for more than six hours per 24-hour period in a sleeping-accommodation establishment (This link will open a new window). To charge the tax on lodging, you must use the amount or rate in effect in the tourism region in which your sleeping-accommodation establishment is located. You must collect the tax and remit it to us every three months using the Return Respecting the Tax on Lodging (form VDZ-541.26-V). You must file the return with us by the last day of the month following the calendar quarter for which the return is being filed.

Please keep in mind that the revenue from the tax on lodging finances the tourism partnership fund that was set up to support and promote the Québec tourism industry.

For more information, see the brochures IN-202-V, Should I Register with Revenu Québec? and IN-260-V, Tax on Lodging. You can also contact us.

Supplies of music lessons to individuals are exempt from GST and QST.

For GST and QST purposes, we consider a music lesson to be an activity designed to develop or improve a skill in order to reach a specific goal. Thus, music lessons must include formal instruction to develop skills in music performance, such as singing, playing an instrument or conducting an orchestra, or in music composition.

However, music lessons do not include instruction to develop or improve skills in any of the following areas:

• music recording
• music history
• music instruction techniques

Furthermore, activities that involve music are not necessarily considered music instruction services or music lessons. For example, activities that involve entertainment or music appreciation, or recreational activities that include music, such as ballroom dancing or aerobics, are not considered music lessons.

The following questions will help you determine whether or not an activity or program constitutes a music lesson:

• Does the supplier provide instruction in clearly defined musical skills or concepts?
• Is the program conducted in a structured and sequential manner with specific goals?
• Do students first have to take an exam or be assessed so that the instructor can determine their appropriate level of instruction?
• During or at the end of the program, does the instructor give feedback to the students regarding their progress? Or does the instructor assess their progress by having them take exams?
• Has the instructor received music training? For example, does the instructor have a degree in music?
• Does the instructor use a recognized method of music instruction?
• Are the lessons designed to meet certain criteria that have been established by a governing body for a standardized assessment or certification by the body or by one of its authorized representatives?
• Does the program involve non-musical elements? If so, what proportion of the schedule is devoted to music instruction? Can the other elements be connected to musical concepts or music instruction methods?
• What is the program's principal goal? More specifically, is the program offered to teach musical skills or for some other purpose, such as recreation?
• How is the program promoted?

If a supplier offers various music programs, some may be considered music lessons for GST and QST purposes and others may not. Each program must be considered separately.

Example

A supplier offers a program for preschool-aged children and their parents. The program is promoted as a great way to spend time together and have fun. The program includes the following activities:

• singing
• musical games
• dancing
• storytelling
• unorganized play

Although the program has certain musical elements, most of the schedule is devoted to other activities. In fact, the program's principal goal is to promote child development and enable children to socialize with other children.

Therefore, the program is not considered a music lesson for GST and QST purposes. Consequently, the supplier's customers must be charged GST and QST.

If you hold a valid Québec taxi driver's permit and offer transportation services by taxi or limousine services, you are carrying on a taxi business and are required to register for the GST/HST and QST.

You can register for the GST/HST and QST by using the Registering for Revenu Québec Files online service, or by completing form LM-1-V, Application for Registration. You must be registered at the time of the first transaction you make, regardless of your total annual taxable sales.

Note that the holder of a taxi driver's permit who receives wages from a taxi business is not required to register.

An information and registration campaign is currently under way so that independent taxi drivers and members of a group may fulfill their fiscal obligations.

For more information, see the brochures Should I Register with Revenu Québec? (IN-202-V) and General Information Concerning the QST and the GST/HST (IN-203-V).

The 0.9% temporary increase in the compensation tax applicable to salaries and wages paid by a financial institution has been eliminated retroactively to January 1, 2013, for certain financial institutions.

As a result, a financial institution that is a corporation can, according to the usual rules, adjust the amount of the instalment payments it makes after July 11, 2013.

Similarly, a financial institution that is not a corporation can choose either of the following options:

• to adjust the amount of periodic remittances it makes after July 11, 2013, up to the amount of Québec income tax withheld for the period
• to include, on line 26 of its 2013 Summary of Source Deductions and Employer Contributions (form RLZ-1.S-V ou RLZ-1.ST-V), the amount of compensation tax remitted using form TPZ-1015-V, Remittance of Source Deductions and Employer Contributions

Note that financial institutions that have made an election under section 150 of the Excise Tax Act are still subject to the temporary increase.

For more information, see Information Bulletin 2013-7, published by the Ministère des Finances et de l'Économie on July 11, 2013.

In recent months, Revenu Québec has published or updated the following documents:

• Plan d'action 2013-2014 (ADM-527)
• Individuals and Rental Income (IN-100-V)
• Overview of the Tax Credit for Home-Support Services for Seniors (IN-151-V)
• The QST and the GST/HST: How They Apply to Medical Devices and Drugs (IN-211-V)
• The QST and the GST/HST: How They Apply to Foods and Beverages (IN-216-V)
• The QST and the GST/HST: How They Apply to Non-Profit Organizations (IN-229-V)
• Guide for Retail Dealers Using the Automated Solution – Program for Administering the Fuel Tax Exemption for Indians (IN-258.SA-V)
• Tax on Lodging (IN-260-V)
• Seniors and Taxation (IN-311-V)
• Déclaration de services aux citoyens et aux entreprises (IN-315)
• Inspections in Restaurant Establishments (IN-573-V)
• Support Payments – Social Assistance Payments (IN-905-V)
• Moving? Give us your new address as soon as possible. (IN-907-V)
• Support Payments: Demand for Payment (IN-908-V)

For its part, the Canada Revenue Agency has published or updated the following documents:

GST/HST Guides

• General Information for GST/HST Registrants (RC4022)
• Doing Business in Canada - GST/HST Information for Non-Residents (RC4027)
• GST/HST New Housing Rebate (RC4028)
• General Application for GST/HST Rebates (RC4033)
• GST/HST Information for the Travel and Convention Industry (RC4036)
• GST/HST Information for Municipalities (RC4049)
• GST/HST Information for Freight Carriers (RC4080)
• GST/HST Information for Non-Profit Organizations (RC4081)
• GST/HST Rebate for Partners (RC4091)
• Harmonized Sales Tax and the Provincial Motor Vehicle Tax (RC4100)
• GST/HST Information for Suppliers of Publications (RC4103)
• GST/HST New Residential Rental Property Rebate (RC4231)
• The Special Quick Method of Accounting for Public Service Bodies (RC4247)

GST/HST Info Sheets

• Harmonized Sales Tax: Information on the Transitional Tax Adjustment for Builders of Housing in Ontario and British Columbia (GI-095)
• Harmonized Sales Tax: Provincial Transitional New Housing Rebates for Housing in Ontario and British Columbia (GI-096)
• Builders and Electronic Filing Requirements (GI-099)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Services (GI-135)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Intangible Personal Property (GI-136)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Memberships (GI-137)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Passenger Transportation Services (GI-138)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Admissions (GI-139)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Freight Transportation Services (GI-140)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Transportation Passes (GI-141)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Prepaid Funeral and Cemetery Arrangements and Interment Property (GI-142)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Tour Packages (GI-143)
• Harmonized Sales Tax: Purchasers of New Housing in Prince Edward Island (GI-144)
• Harmonized Sales Tax: Information on Owner-built Homes, Mobile Homes and Floating Homes in Prince Edward Island (GI-145)
• Harmonized Sales Tax: Information for Builders of New Housing in Prince Edward Island (GI-146)
• Harmonized Sales Tax: Stated Price Net of the GST/HST New Housing Rebate in Prince Edward Island (GI-147)
• Harmonized Sales Tax: Stated Price Net of the GST/HST New Housing Rebate and the P.E.I. PST Transitional New Housing Rebate (GI-148)
• Harmonized Sales Tax: Information for Landlords of New Rental Housing in Prince Edward Island (GI-149)
• Harmonized Sales Tax: Information on the Transitional Tax Adjustment for Builders of Housing in Prince Edward Island (GI-150)
• Harmonized Sales Tax: Provincial Transitional New Housing Rebate for Housing in Prince Edward Island (GI-151)
• Harmonized Sales Tax: Assignment of Purchase and Sale Agreements for Grandparented Housing in Prince Edward Island (GI-152)
• Harmonized Sales Tax: Builder Disclosure Requirements in Prince Edward Island (GI-153)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Payment of the GST/HST by Prince Edward Island Government Entities (GI-154)
• British Columbia: Transition to the Goods and Services Tax – Payment of the GST/HST by B.C. Government Entities (GI-155)
• Elimination of the Harmonized Sales Tax in British Columbia: British Columbia Transition Tax on New Housing (GI-156)
• Elimination of the Harmonized Sales Tax in British Columbia: British Columbia Transition Rebate for Builders of New Housing (GI-157)
• Payment of the GST/HST by Quebec Government Entities (GI-158)
• HST and First Nations in Prince Edward Island (GI-159)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Goods (GI-160)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Returns and Exchanges (GI-161)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Continuous Supplies and Budget Payment Arrangements (GI-162)
• Harmonized Sales Tax: Leases of Real Property in Prince Edward Island (GI-163)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Information for Non-registrant Builders (GI-164)
• Prince Edward Island: Transition to the Harmonized Sales Tax – Builders and Recaptured Input Tax Credits (GI-165)

GST/HST Notices

• Harmonized Sales Tax for Prince Edward Island – Questions and Answers that Relate to Public Service Bodies, Health and Education (Notice 282)

GST/HST Policy Statement

• 100% Rebate for Charity Exports (P-132)

GST/HST Technical Information Bulletins

• GST/HST Administrative Policy – Application of the GST/HST to Indians (B-039)
• Investment Plans (Including Segregated Funds of an Insurer) and the HST (B-107)

A supply of a prescribed diagnostic, treatment or other healthcare service rendered to an individual is exempt from GST and QST if the supply is made on the order of any of the following healthcare professionals:

• a physician or a dentist;
• a practitioner, such as a chiropractor, a psychologist, a physiotherapist or a midwife;
• a nurse authorized under the laws of a province to order such a service if the order is made within a nurse-patient relationship (for supplies made after February 26, 2008); or
• a pharmacist authorized under the laws of a province to practise the profession of pharmacy and to order such a service if the order is made within a pharmacist-patient relationship (for supplies made after March 29, 2012).

The exemption is limited to the diagnostic, treatment and other healthcare services described in the regulations made under the Excise Tax Act and the Act respecting the Québec sales tax. Those prescribed services consist of laboratory, radiological and other diagnostic services generally available in healthcare institutions and facilities, including the administration of drugs, biologicals (such as blood and plasma derivatives and vaccines) or related preparations in conjunction with the supply of such services.

The phrase "laboratory, radiological and other diagnostic services generally available in healthcare institutions and facilities" means

• tests;
• studies; or
• investigative or analytical procedures (plus interpretation of the results and reports of the findings) that are generally available in public hospitals and that are used in the detection and determination of the causes of disease.

Diagnostic services include, for example,

• in vitro diagnostic testing;
• serological testing;
• urinalysis;
• microscopic analysis;
• radiology and other diagnostic imaging services, such as X-rays, CT scans, MRIs, mammograms and ultrasounds;
• fluroscopy;
• echocardiography;
• electrocardiography; and
• electromyography.

For purposes of the regulations, diagnostic services do not include paternity testing or drug or alcohol testing that is not performed for diagnostic purposes.

Generally speaking, the exemption applies to supplies of services made by private medical laboratories that are equipped for diagnostic services, including the collection and handling of specimens and other data, the analysis of specimens or data, and the preparation of reports to help the aforementioned healthcare professionals to provide care to their patients

There are both technical and professional aspects associated with the supply of diagnostic services, including

• provision of the premises, equipment, supplies and personnel;
• preparation of the patient;
• performance of the test, study or analytical procedure, including any clinical procedure associated with the diagnostic service;
• clinical supervision (including any approval, modification or intervention required during the performance of the test, study or analytical procedure) and quality control of all aspects of the procedure;
• monitoring and intervention, as required following the test, study or analytical procedure;
• preparation of documents reporting the results of the test, study or analytical procedure as well as delivery of such documents to a physician, a dentist or one of the other aforementioned healthcare professionals;
• interpretation of the results of the test, study or analytical procedure, which is usually performed by a physician or a dentist; and
• preparation of a duly signed and dated written report concerning the diagnostic service and delivery of the report to the healthcare professional who requested the diagnostic service on behalf of a patient.

Note that any supply of a diagnostic or treatment service rendered to an individual for cosmetic purposes and not for medical or reconstructive purposes is not exempt from either GST or QST. Independent contractors hired by medical laboratories to perform part of the diagnostic services

In the case of supplies of diagnostic services made by medical laboratories, employees or other persons, such as independent contractors, may perform part of the services. Supplies of services made by independent contractors to medical laboratories do not qualify for the exemption that applies to supplies of diagnostic services rendered to an individual. Medical laboratories acquire supplies of services from independent contractors in order to, in turn, make supplies of diagnostic services. GST and QST generally apply to the supplies of services made by independent contractors.

Example 1

A medical laboratory hires an independent contractor to perform the following services:

• to take blood from an individual at his or her home and bring the blood to the medical laboratory;
• to perform tests on the blood; and
• to provide the results of the tests to the medical laboratory.

Then the medical laboratory performs other tests on the blood and prepares a report for the healthcare professional who requested the diagnostic services on behalf of the individual.

GST and QST apply to the supply of services made by the independent contractor to the medical laboratory.

Example 2

A physician refers a patient with an undiagnosed sleep disorder to a sleep clinic for testing. The diagnostic service supplied by the sleep clinic involves the following steps:

• the patient completes a detailed questionnaire;
• the sleep-study coordinator meets with the patient;
• technicians of the clinic monitor the patient while he or she is asleep and connected to monitoring equipment;
• the data gathered is used to prepare a report;
• one of the clinic's staff physicians discusses the results with the patient; and
• the results are forwarded to the physician who requested the testing.

The supply of a diagnostic service made by the sleep clinic is exempt from GST and QST because the diagnostic service is generally supplied by public hospitals and was rendered to an individual on the order of a physician.

If part of the testing takes place outside the sleep clinic, the supply of that service is also exempt. Such is the case, for example, where a patient takes portable monitoring equipment home from the clinic to record his or her sleep habits there and later returns the equipment to the clinic.

Example 3

A nurse orders blood tests for a patient to be performed at a private laboratory. The patient goes to the laboratory and the blood tests requested are performed. The results are then interpreted by one of the laboratory's staff physicians and a report is provided to the nurse. The supply of the diagnostic service rendered to the patient by the private laboratory on the order of the nurse is exempt from GST and QST.

For more information, contact us.

On January 1, 2013, the financial services that were zero-rated under the QST system became, in general, tax-exempt, as under the GST system.

An amendment will be made to the transitional rules to ensure that the tax status of most financial services is appropriately changed from zero-rated to tax-exempt. The amendment provides that a taxable supply of movable property is not included in the calculation of the small supplier threshold where the following conditions are met:

• The property is not capital property.
• The seller of the property is a financial services provider.
• The seller owned the property before January 1, 2013.
• The GST does not apply to the sale of the property.

A financial services provider whose QST registration was cancelled on January 1, 2013, because that provider was not a GST/HST registrant does not have to collect the QST on the sale of such property.

Example 1

An insurance broker sells a list of customers in December 2013. The list was partially compiled before January 1, 2013. The broker's QST registration was cancelled on January 1, 2013. The GST does not apply to the sale.

The broker does not have to register for the QST to collect this tax.

However, this measure does not apply where the financial services provider remains a QST registrant.

Example 2

An insurance broker sells a list of customers in November 2013. The list was partially compiled before January 1, 2013. The broker remained a QST registrant on January 1, 2013. The GST does not apply to the sale.

The sale will be taxable under the QST system.

As of July 1, 2013, the tax on lodging will be increased from $2 to $3 per overnight stay in the Cantons-de-l'Est and Bas-Saint-Laurent tourism regions. The tax applies to the supply of an accommodation unit billed and occupied after June 30, 2013.

Transitional rules apply further to the increase. See Transitional Rules for the Cantons-de-l'Est and Bas-Saint-Laurent Tourism Regions for more information.

Services rendered by a moving company are subject to goods and services tax (GST) and Québec sales tax (QST). A moving company that renders services in Québec must therefore be registered for GST/HST and QST purposes, collect the taxes and remit them to us using form FP-500-V, Detailed Calculations, or form FPZ-500-V, GST/HST – QST Return. In addition, the company can claim an input tax credit (ITC) for the GST paid and an input tax refund (ITR) for the QST paid in respect of any property or services acquired to render the moving services.

However, a business that is a small supplier does not have to register for GST/HST and QST purposes or collect and remit the taxes, but it also cannot claim ITCs and ITRs for the taxes paid in respect of its purchases. A business is considered a small supplier if its total taxable sales in a particular calendar quarter and in the four calendar quarters immediately preceding that quarter are $30,000 or less. Its total taxable sales consist of all sales made worldwide during those periods by the business and its associates.

Note that if the invoices issued by the moving company to its customers show the type of services rendered, the amount of taxes collected and the company's GST/HST and QST registration numbers, customers can use the invoices to support their claims for a deduction for moving expenses or for an ITC or ITR, as applicable.

Under certain circumstances, Indians are exempt from paying consumption taxes under the GST and QST systems. However, Métis, Inuit, Non-Status Indians and Indians from the United States are not considered to be Indians for the purposes of this exemption. They must therefore pay GST and QST on taxable goods and services that they purchase (excluding zero-rated goods and services).

In the same way, the exemption from paying consumption taxes that applies to Indian bands or band-empowered entities does not apply to entities that govern or represent Métis, Inuit or Non-Status Indians.

The term "Indian" designates a person registered as such in accordance with the Indian Act. An Indian is not required to live in or maintain a dwelling on a reserve. Aboriginal Affairs and Northern Development Canada (AANDC) can issue a Secure Certificate of Indian Status card (SCIS card) or a Temporary Confirmation of Registration Document(TCRD) to an Indian. There are no other identity or membership cards that allow an Indian to obtain an exemption from paying consumption taxes.

For more information concerning identity cards, visit the AANDC website. To know more about the TCRD, consult GST/HST Notice 264, Sales Made to Indians and Documentary Evidence - Temporary Confirmation of Registration Document published by the Canada Revenue Agency. 

The term "Indian band" designates a band council or a tribal council. The expression “band-empowered entity” designates a legal person, a commission, a council, an association, a society or any other organization that belongs to or is controlled by a band, a tribal council or a group of bands (except a tribal council).

For more information, consult GST/HST Technical Information Bulletin B-039, GST/HST Administrative Policy - Application of the GST/HST to Indians.

An organization that has been designated as a municipality, that is determined to be a municipality or that has been designated as a hospital authority must notify Revenu Québec of any changes to its organizational structure, where such changes are the result of an amalgamation or a merger with another organization, or the result of the organization becoming incorporated.

This requirement applies to organizations such as

• non-profit organizations, charities, housing cooperatives and water haulers that have been designated as municipalities because they provide municipal services;
• public libraries, waste management bodies and volunteer fire-fighting organizations that have been determined to be municipalities;
• hospitals and health and social services centres that have been designated as hospital authorities because they operate public hospitals.

For GST and QST purposes, the new organization created as a result of the amalgamation, merger or incorporation is generally considered to be a separate person from any of the former organizations.

In addition, if the new organization makes taxable supplies of property or services in Québec, it must register for the GST and QST, unless it is a small supplier. It can also file an application to have its branches or divisions file separate returns. In some cases, the new organization can keep the GST and QST registration numbers of one of the former organizations.

To register the new organization for the GST and QST, use the Registering for Revenu Québec Files online service or form LM-1-V, Application for Registration. For more information, refer to the brochure Should I Register with Revenu Québec? (IN-202-V).

Note that an organization that is party to a merger or an amalgamation, or that has become incorporated, must generally cancel its GST and QST registration and file its GST and QST returns for the periods preceding the merger, amalgamation or incorporation. The GST and QST registration of any branches or divisions must also be cancelled. The request for cancellation must be made by filing form LM-1.A-V, Request for Cancellation or Variation of Registration. For more information, refer to GST/HST Memorandum 2-7, Cancellation of Registration, which is available on the website of the Canada Revenue Agency.

Status of the new organization

An organization that was previously designated as a municipality, determined to be a municipality or designated as a hospital authority loses that status when a new organization is created as a result of that organization becoming incorporated or party to a merger or an amalgamation.

The new organization must therefore apply to be designated as a municipality, to be determined to be a municipality or to be designated as a hospital authority in order to be entitled to public service body rebates. Note that in order for certain supplies it makes to be exempt from GST and QST, in the same way that such supplies made by a municipality or a public institution are exempt from GST and QST, the new organization must be determined to be a municipality or designated as a hospital authority.

The organization must send its written application, along with supporting documents, to the following address:

Directeur des taxes à la consommation
Direction générale de la législation et du registraire des entreprises
Revenu Québec
3800, rue de Marly, secteur 5-2-2
Québec (Québec)  G1X 4A5

GST, QST and registered charities

Some organizations that are designated as municipalities, determined to be municipalities or designated as hospital authorities for GST and QST purposes are also registered charities for income tax purposes. An organization that merges with a registered charity must inform Revenu Québec of the merger.

The leasing of a site on which a recreational unit is situated may be exempt from GST and QST even if the site is not located in a residential trailer park. The leasing of the site may be an exempt supply if the recreational unit occupying the site

• qualifies as a residential unit for GST and QST purposes;
• is permanently affixed to land for long-term use as a place of residence, in the same way as a residential unit;
• is used as a place of residence for individuals.

The term "recreational unit" refers to a mini-home, a park model trailer, a travel trailer or a similar unit that has residential attributes similar to those of a mobile home. However, a folding camping trailer (also known as a pop-up or tent trailer), a camper van, a truck camper, a motor home or a similar unit or vehicle is not considered to be a recreational unit.

The question of whether or not a recreational unit can be considered to be a residential unit, to be affixed to land for long-term use and to be used as a place of residence is a question of fact and is therefore determined on a case-by-case basis.

For more information, consult GST/QST Policy Statement P-104, Supply of Land for Recreational Units such as Mini homes, Park Model Trailers, and Travel Trailers, and GST/HST Memorandum 19.2, Residential Real Property.

As of May 1, 2013, the tax on lodging will increase to $3 per overnight stay in the Manicouagan tourism region. The tax applies to an accommodation unit that is billed and occupied after April 30, 2013.

For information on the transitional rules that apply further to this tax increase, click Tax on Lodging.