Revenu Québec Infos

Validation of QST and GST Numbers

mer, 10/25/2017 - 13:35

Did you know you can use the following online services to verify that a business billing you QST and GST is a QST and GST/HST registrant?

Validation of a QST Registration Number (Revenu Québec)
Confirming a GST/HST account number (Canada Revenue Agency)

Your requests for input tax credits and input tax refunds could be refused if the business is not a registrant.

Validation of QST and GST Numbers

mer, 10/25/2017 - 13:35

Did you know you can use the following online services to verify that a business billing you QST and GST is a QST and GST/HST registrant?

Validation of a QST Registration Number (Revenu Québec)
Confirming a GST/HST account number (Canada Revenue Agency)

Your requests for input tax credits and input tax refunds could be refused if the business is not a registrant.

Online Courses

mer, 10/25/2017 - 13:35

Online supplies of a “service of instructing” individuals in a course or of administering examinations in respect of a course may be GST- and QST-exempt if the following conditions are met:

The service is not zero-rated.
The service is provided by a government, a school authority, a vocational school, a public college or a university.
The service is a service of instructing individuals in, or administering examinations in respect of, courses leading to certificates, diplomas, licences or similar documents, or classes or ratings in respect of licences, that attest to the competence of individuals to practise or perform a trade or vocation.
The supplier has not filed form FP-2029-V, Election or Revocation of an Election by an Organization to Have the Supply of Its Courses, Examinations and Certificates Deemed Taxable.

In order to determine whether an online supply is exempt, you must first determine whether it is a supply of a service or of intangible personal property.

Service of instructing individuals

The following generally indicate that a supply constitutes a service of instructing individuals:

The activity involves the provision of systematic instruction.
The supplier monitors or supervises participants' progress or learning.
The supplier assesses participants' progress during the course of the activity and provides ongoing support, feedback and guidance.
The supplier may be available to assist participants with the subject matter at a time and location different from the time and place in which the activity occurs.
The supplier assesses participants' competency upon completion of the activity by requiring them to formally demonstrate the knowledge they have acquired, and the activity may have to be repeated if the competency is not achieved.
Participants are required to invest time and effort outside of the activity (for example, completing assignments or reading course material).
The supplier may require successful completion of recognized prerequisites (for example, where participants must complete an introductory computer courses before taking intermediate computer courses).
Participants may be required to successfully complete the activity before being permitted to participate in another activity.
The activity is part of a series of activities leading to a formal recognition of skills.
The activity may be part of a program that consists of a series of two or more related activities.
The activity occurs at set intervals over an extended period of time (weeks or months).
The activity does not include the provision of rights or if there is a provision of rights they are incidental to or part of a single supply of a service (for example, right to use library facilities).
The subject of the activity is broad (for example, Canadian History).
The supplier advertises or promotes the activity as instructing participants.
The activity is promoted alongside others in a prospectus or calendar prepared by an educational institution.
The promotional material indicates that the activity is part of a broader program which may lead to a formal recognition of skills.
The promotional material is aimed at individuals who possess the prerequisites for participating in the activity.

Where none of the above apply, the online supply of the service is not a supply of a “service of instructing”.

Intangible personal property

Conversely, the following generally indicate that a supply is not a supply of a service of instructing but rather a supply of intangible personal property (for example, admission to a workshop or seminar):

There is little individualized interaction between the supplier and participants.
Attendance at the activity is sufficient for participants to receive evidence of successful or satisfactory completion of the activity.
The main purpose of the activity is to provide information to participants or to facilitate the exchange of information between them.
The subject of the activity is narrowly focused.
Each activity is discrete with no formal prerequisites for attendance.
Participation in the activity is not a prerequisite for participation in another activity.
The activity is promoted as a stand-alone activity.
The activity is promoted as a workshop or seminar that is open to the general public.
The activity occurs over a few hours, a day or a few consecutive days.

For more information, refer to Technical Information Bulletin B-090, GST/HST and Electronic Commerce.

Online Courses

mer, 10/25/2017 - 13:35

Online supplies of a “service of instructing” individuals in a course or of administering examinations in respect of a course may be GST- and QST-exempt if the following conditions are met:

The service is not zero-rated.
The service is provided by a government, a school authority, a vocational school, a public college or a university.
The service is a service of instructing individuals in, or administering examinations in respect of, courses leading to certificates, diplomas, licences or similar documents, or classes or ratings in respect of licences, that attest to the competence of individuals to practise or perform a trade or vocation.
The supplier has not filed form FP-2029-V, Election or Revocation of an Election by an Organization to Have the Supply of Its Courses, Examinations and Certificates Deemed Taxable.

In order to determine whether an online supply is exempt, you must first determine whether it is a supply of a service or of intangible personal property.

Service of instructing individuals

The following generally indicate that a supply constitutes a service of instructing individuals:

The activity involves the provision of systematic instruction.
The supplier monitors or supervises participants' progress or learning.
The supplier assesses participants' progress during the course of the activity and provides ongoing support, feedback and guidance.
The supplier may be available to assist participants with the subject matter at a time and location different from the time and place in which the activity occurs.
The supplier assesses participants' competency upon completion of the activity by requiring them to formally demonstrate the knowledge they have acquired, and the activity may have to be repeated if the competency is not achieved.
Participants are required to invest time and effort outside of the activity (for example, completing assignments or reading course material).
The supplier may require successful completion of recognized prerequisites (for example, where participants must complete an introductory computer courses before taking intermediate computer courses).
Participants may be required to successfully complete the activity before being permitted to participate in another activity.
The activity is part of a series of activities leading to a formal recognition of skills.
The activity may be part of a program that consists of a series of two or more related activities.
The activity occurs at set intervals over an extended period of time (weeks or months).
The activity does not include the provision of rights or if there is a provision of rights they are incidental to or part of a single supply of a service (for example, right to use library facilities).
The subject of the activity is broad (for example, Canadian History).
The supplier advertises or promotes the activity as instructing participants.
The activity is promoted alongside others in a prospectus or calendar prepared by an educational institution.
The promotional material indicates that the activity is part of a broader program which may lead to a formal recognition of skills.
The promotional material is aimed at individuals who possess the prerequisites for participating in the activity.

Where none of the above apply, the online supply of the service is not a supply of a “service of instructing”.

Intangible personal property

Conversely, the following generally indicate that a supply is not a supply of a service of instructing but rather a supply of intangible personal property (for example, admission to a workshop or seminar):

There is little individualized interaction between the supplier and participants.
Attendance at the activity is sufficient for participants to receive evidence of successful or satisfactory completion of the activity.
The main purpose of the activity is to provide information to participants or to facilitate the exchange of information between them.
The subject of the activity is narrowly focused.
Each activity is discrete with no formal prerequisites for attendance.
Participation in the activity is not a prerequisite for participation in another activity.
The activity is promoted as a stand-alone activity.
The activity is promoted as a workshop or seminar that is open to the general public.
The activity occurs over a few hours, a day or a few consecutive days.

For more information, refer to Technical Information Bulletin B-090, GST/HST and Electronic Commerce.

Online Courses

mer, 10/25/2017 - 13:35

Online supplies of a “service of instructing” individuals in a course or of administering examinations in respect of a course may be GST- and QST-exempt if the following conditions are met:

The service is not zero-rated.
The service is provided by a government, a school authority, a vocational school, a public college or a university.
The service is a service of instructing individuals in, or administering examinations in respect of, courses leading to certificates, diplomas, licences or similar documents, or classes or ratings in respect of licences, that attest to the competence of individuals to practise or perform a trade or vocation.
The supplier has not filed form FP-2029-V, Election or Revocation of an Election by an Organization to Have the Supply of Its Courses, Examinations and Certificates Deemed Taxable.

In order to determine whether an online supply is exempt, you must first determine whether it is a supply of a service or of intangible personal property.

Service of instructing individuals

The following generally indicate that a supply constitutes a service of instructing individuals:

The activity involves the provision of systematic instruction.
The supplier monitors or supervises participants' progress or learning.
The supplier assesses participants' progress during the course of the activity and provides ongoing support, feedback and guidance.
The supplier may be available to assist participants with the subject matter at a time and location different from the time and place in which the activity occurs.
The supplier assesses participants' competency upon completion of the activity by requiring them to formally demonstrate the knowledge they have acquired, and the activity may have to be repeated if the competency is not achieved.
Participants are required to invest time and effort outside of the activity (for example, completing assignments or reading course material).
The supplier may require successful completion of recognized prerequisites (for example, where participants must complete an introductory computer courses before taking intermediate computer courses).
Participants may be required to successfully complete the activity before being permitted to participate in another activity.
The activity is part of a series of activities leading to a formal recognition of skills.
The activity may be part of a program that consists of a series of two or more related activities.
The activity occurs at set intervals over an extended period of time (weeks or months).
The activity does not include the provision of rights or if there is a provision of rights they are incidental to or part of a single supply of a service (for example, right to use library facilities).
The subject of the activity is broad (for example, Canadian History).
The supplier advertises or promotes the activity as instructing participants.
The activity is promoted alongside others in a prospectus or calendar prepared by an educational institution.
The promotional material indicates that the activity is part of a broader program which may lead to a formal recognition of skills.
The promotional material is aimed at individuals who possess the prerequisites for participating in the activity.

Where none of the above apply, the online supply of the service is not a supply of a “service of instructing”.

Intangible personal property

Conversely, the following generally indicate that a supply is not a supply of a service of instructing but rather a supply of intangible personal property (for example, admission to a workshop or seminar):

There is little individualized interaction between the supplier and participants.
Attendance at the activity is sufficient for participants to receive evidence of successful or satisfactory completion of the activity.
The main purpose of the activity is to provide information to participants or to facilitate the exchange of information between them.
The subject of the activity is narrowly focused.
Each activity is discrete with no formal prerequisites for attendance.
Participation in the activity is not a prerequisite for participation in another activity.
The activity is promoted as a stand-alone activity.
The activity is promoted as a workshop or seminar that is open to the general public.
The activity occurs over a few hours, a day or a few consecutive days.

For more information, refer to Technical Information Bulletin B-090, GST/HST and Electronic Commerce.

Third-Party Fundraising

mer, 10/25/2017 - 13:35

This article discusses third-party fundraising for the benefit of a registered charity as defined under the Income Tax Act (for the GST) and the Taxation Act (for the QST).

In this article, the term “third-party fundraiser” refers to a person that is not a registered charity (and is therefore neither a charity nor, in some circumstances, a public institution for GST and QST purposes), and that is operated for the sole purpose of raising funds on behalf of a registered charity. The information in this article does not apply to fundraising conducted by a registered charity.

Generally, fundraising by its very nature is considered a for-profit activity. Organizations that are established and administered for the sole purpose of raising funds are not considered non-profit organizations for GST and QST purposes. This is the case even if all the funds collected are donated to a registered charity. Such organizations do not meet the “operated solely for a purpose other than profit” requirement in the definition of “non-profit organization.”

For more information on the definition of “non-profit organization” for GST and QST purposes, see GST/HST Policy Statement P-215, Determination of whether an entity is a "non-profit organization" for purpose of the Excise Tax Act (ETA).

A third-party fundraiser may make supplies of property or services in the course of a fundraising activity or event. As a rule, such supplies are taxable, even if the funds collected are donated to a registered charity.

Examples of taxable supplies that may be made by a third-party fundraiser include:

admissions to a fundraising dinner or ball;
entry in a golf tournament;
promotional services provided to sponsors of a fundraising event;
goods sold as part of a fundraising campaign (such as T-shirts or chocolate bars);
food and beverages sold at a concession stand during a fundraising event;
tickets to professional performances.

Ticket sales to performances or athletic or competitive events are exempt from the application of the GST and QST if 90% or more of the performers, athletes or competitors are not paid directly or indirectly for their participation. Government and municipal grants, reasonable amounts remitted as prizes, gifts, or allowances for travel or for other incidental expenses are not considered remuneration. In addition, the performance or event cannot be advertised as featuring paid participants.

The admissions will not be exempt if they are for competitive events where paid participants compete for cash prizes.

Where the third-party fundraiser makes a supply as agent of a charity, the supply has the same tax status as if it were made by the charity directly. For more information on whether a person is acting as agent in making a transaction on behalf of another person, see GST/HST Info Sheet GI-012, Agents.

If registered for GST and QST purposes, the third-party fundraiser must collect these taxes on taxable supplies and remit the amounts collected to us. The fundraiser can claim input tax credits and input tax refunds for the taxes paid on purchases related to its taxable supplies. A person must register for GST and QST purposes if the person makes taxable supplies in Québec and is not a small supplier.

Example

A group of concerned citizens forms an association to raise money for charitable organizations in their community. Each year the association holds a golf tournament where the funds raised are donated to a registered charity. The association does not have any other activities. The association solicits sponsorships from local businesses, in exchange for which the association will place the businesses' logos on all tournament signage and on the tournament website. Does the association need to charge GST and QST on the funds received from sponsors and on the tournament entry fees?

The association is not a non-profit organization for GST and QST purposes as the association is not operated for a purpose other than profit. The association is making taxable supplies of promotional services to the sponsors of the tournament. The association is also making taxable supplies of the right to play in the tournament. Therefore, if the association is a registrant, it must collect and remit to us GST and QST on the sponsorships and the tournament entry fees.

Third-Party Fundraising

mer, 10/25/2017 - 13:35

This article discusses third-party fundraising for the benefit of a registered charity as defined under the Income Tax Act (for the GST) and the Taxation Act (for the QST).

In this article, the term “third-party fundraiser” refers to a person that is not a registered charity (and is therefore neither a charity nor, in some circumstances, a public institution for GST and QST purposes), and that is operated for the sole purpose of raising funds on behalf of a registered charity. The information in this article does not apply to fundraising conducted by a registered charity.

Generally, fundraising by its very nature is considered a for-profit activity. Organizations that are established and administered for the sole purpose of raising funds are not considered non-profit organizations for GST and QST purposes. This is the case even if all the funds collected are donated to a registered charity. Such organizations do not meet the “operated solely for a purpose other than profit” requirement in the definition of “non-profit organization.”

For more information on the definition of “non-profit organization” for GST and QST purposes, see GST/HST Policy Statement P-215, Determination of whether an entity is a "non-profit organization" for purpose of the Excise Tax Act (ETA).

A third-party fundraiser may make supplies of property or services in the course of a fundraising activity or event. As a rule, such supplies are taxable, even if the funds collected are donated to a registered charity.

Examples of taxable supplies that may be made by a third-party fundraiser include:

admissions to a fundraising dinner or ball;
entry in a golf tournament;
promotional services provided to sponsors of a fundraising event;
goods sold as part of a fundraising campaign (such as T-shirts or chocolate bars);
food and beverages sold at a concession stand during a fundraising event;
tickets to professional performances.

Ticket sales to performances or athletic or competitive events are exempt from the application of the GST and QST if 90% or more of the performers, athletes or competitors are not paid directly or indirectly for their participation. Government and municipal grants, reasonable amounts remitted as prizes, gifts, or allowances for travel or for other incidental expenses are not considered remuneration. In addition, the performance or event cannot be advertised as featuring paid participants.

The admissions will not be exempt if they are for competitive events where paid participants compete for cash prizes.

Where the third-party fundraiser makes a supply as agent of a charity, the supply has the same tax status as if it were made by the charity directly. For more information on whether a person is acting as agent in making a transaction on behalf of another person, see GST/HST Info Sheet GI-012, Agents.

If registered for GST and QST purposes, the third-party fundraiser must collect these taxes on taxable supplies and remit the amounts collected to us. The fundraiser can claim input tax credits and input tax refunds for the taxes paid on purchases related to its taxable supplies. A person must register for GST and QST purposes if the person makes taxable supplies in Québec and is not a small supplier.

Example

A group of concerned citizens forms an association to raise money for charitable organizations in their community. Each year the association holds a golf tournament where the funds raised are donated to a registered charity. The association does not have any other activities. The association solicits sponsorships from local businesses, in exchange for which the association will place the businesses' logos on all tournament signage and on the tournament website. Does the association need to charge GST and QST on the funds received from sponsors and on the tournament entry fees?

The association is not a non-profit organization for GST and QST purposes as the association is not operated for a purpose other than profit. The association is making taxable supplies of promotional services to the sponsors of the tournament. The association is also making taxable supplies of the right to play in the tournament. Therefore, if the association is a registrant, it must collect and remit to us GST and QST on the sponsorships and the tournament entry fees.

New Publications

mer, 10/25/2017 - 13:35

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

Employment Expenses (IN-118-V)
New Residents and Income Tax (IN-119-V)
General Information Concerning the QST and the GST/HST (IN-203-V)
QST, GST/HST and Fuel Tax: How They Apply to Freight Carriers (IN-218-V)
An Overview of the Fuel Tax Act (IN-222-V)
Shelter Allowance Program (IN-165-V)
Questions About Tips: Employees (IN-251-V)
Taxable Benefits (IN-253-V)
The QST and the GST/HST: How They Apply to Residential Complexes (Construction or Renovation) (IN-261-V)
Employee or Self-Employed Person? (IN-301-V)
Voluntary Disclosure: Rectifying Your Tax Situation (IN-309-V)
Information Bulletin for Restaurateurs (IN-522-V)
Information for Restaurateurs (IN-575-V)
SRM User Guide (IN-577-V)
Support Payments: Application for Exemption (IN-900-V)
The Payment of Support (IN-901-V)
Support Payments: When the Debtor or Creditor Resides Outside Québec (IN-904-V)
Support Payments Bulletin (IN-906-V)

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

GST/HST Guides

GST/HST New Housing Rebate (RC4028)
Financial Institution GST/HST Annual Information Return (RC4419)

GST/HST Info Sheets

Insurance – Appraisals of Damage Caused to Property (GI-134)
Application of the GST/HST to Home Care Services (GI-166)

New Publications

mer, 10/25/2017 - 13:35

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

Employment Expenses (IN-118-V)
New Residents and Income Tax (IN-119-V)
General Information Concerning the QST and the GST/HST (IN-203-V)
QST, GST/HST and Fuel Tax: How They Apply to Freight Carriers (IN-218-V)
An Overview of the Fuel Tax Act (IN-222-V)
Shelter Allowance Program (IN-165-V)
Questions About Tips: Employees (IN-251-V)
Taxable Benefits (IN-253-V)
The QST and the GST/HST: How They Apply to Residential Complexes (Construction or Renovation) (IN-261-V)
Employee or Self-Employed Person? (IN-301-V)
Voluntary Disclosure: Rectifying Your Tax Situation (IN-309-V)
Information Bulletin for Restaurateurs (IN-522-V)
Information for Restaurateurs (IN-575-V)
SRM User Guide (IN-577-V)
Support Payments: Application for Exemption (IN-900-V)
The Payment of Support (IN-901-V)
Support Payments: When the Debtor or Creditor Resides Outside Québec (IN-904-V)
Support Payments Bulletin (IN-906-V)

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

GST/HST Guides

GST/HST New Housing Rebate (RC4028)
Financial Institution GST/HST Annual Information Return (RC4419)

GST/HST Info Sheets

Insurance – Appraisals of Damage Caused to Property (GI-134)
Application of the GST/HST to Home Care Services (GI-166)

Public Service Bodies' Rebate

mer, 10/25/2017 - 13:35

Many public service bodies (PSBs) are entitled to a PSB rebate of the GST and QST paid or payable on certain purchases and expenses. PSBs that have paid HST on purchases and expenses in a participating province may qualify for a PSB rebate of the HST paid.

Since January 1, 2014, municipalities (and organizations designated as a municipality) are entitled to a rebate of 62.8% of the QST paid on property and services acquired to make exempt supplies. The rebate mechanism is similar to that provided for under the GST system.

PSBs eligible for a rebate

A PSB may be eligible for a rebate if, on the last day of the claim period or on the last day of the fiscal year that includes that claim period, it is either

a charity;
a qualifying non-profit organization; or
a selected public service body.

Therefore, a PSB could be entitled to a rebate for some claim periods, but not for others.

Taxes that qualify for a rebate

The rebate claimed by a PSB is generally calculated based on the taxes that were payable, or that were paid without becoming payable, during the claim period. However, the following amounts do not give entitlement to the rebate:

any input tax credits and input tax refunds claimed by the PSB, or to which the PSB was entitled, for the taxes paid during that period;
any tax refunds, rebates or remissions that it is reasonable to expect the PSB received or was entitled to receive;
any amount of GST or QST that was refunded, credited, or adjusted in favour of the PSB and for which it has received a credit note from the supplier or has issued a debit note to the supplier.

The taxes payable during a given claim period cannot generally be claimed in the rebate application for a subsequent claim period. If a PSB has not claimed rebates for several periods, it must file a separate rebate application form for each period for which it is entitled to a rebate.

Rebate application forms

A PSB filing a rebate application for the first time must complete the GST/HST Rebate Application for Public Service Bodies(form FPZ-66-V) for the GST and the Application for a QST Rebate for Public Service Bodies(form VDZ-387-V) for the QST.

After we process the application, we will send the PSB personalized versions of the forms, which the PSB will be required to use for its next application.

Frequency of rebate applications

If the PSB is registered for the GST and the QST, it must apply for a rebate when it files its returns, whether it be on a monthly, quarterly or annual basis.

If the PSB is not registered for the GST and the QST, it must apply for a rebate twice a year: once for the first six months of its fiscal year, and a second time for the last six months.

Filing deadlines for the rebate

A PSB registered for the GST and the QST has four years from the due date of its GST and QST returns for a given claim period to file a rebate application. A PSB that is not registered for the GST and the QST has four years from the last day of the claim period to file a rebate application.

If a PSB has already claimed a rebate for a claim period and subsequently realizes that it could have claimed rebates for other amounts of tax for the same period, it must adjust the previously filed application by including the additional amounts of tax. It cannot include the amounts in the rebate application for a different claim period. Adjustments to applications must generally be made no later than four years after the date the applications were originally filed.

Example 1

A charity that is not registered for the GST and the QST pays GST and QST on purchases and expenses that qualify for a rebate throughout its fiscal year ending December 31, 2013. Can the charity file a single rebate application that covers the entire fiscal year?

As the charity is not registered for the GST and the QST, it must file two rebate applications per fiscal year: one for the first six months and another for the last six months. The charity must file one rebate application for the period from January 1, 2013, to June 30, 2013, and another for the period from July 1, 2013, to December 31, 2013. It must calculate its rebate based on the taxes paid or payable for each respective period.

Example 2

A charity that is registered for the GST and the QST files monthly tax returns. It always files rebate applications with its tax returns before the due date of the returns. In August 2013, the charity realized that it had not included an invoice dated April 24, 2013, in its April rebate application. The invoice showed a GST amount of $1,500 and a QST amount of $2,992. Can the charity include these amounts in its rebate application for the period from August 1, 2013, to August 31, 2013?

The taxes became payable during the period from April 1, 2013, to April 30, 2013. Therefore, the charity may only claim the rebate on the application for the period from April 1, 2013, to April 30, 2013. Since the charity had already filed its rebate application for that period, it must adjust that application rather than include the taxes in an application for a subsequent period.

Example 3

In July 2013, an organization that is not registered for the GST and the QST was designated as a municipality in respect of certain designated activities. The effective date of the designation is July 1, 2009. The fiscal year of the organization designated as a municipality ends on December 31. How can the organization claim a rebate of the taxes paid or payable since July 1, 2009?

Since the organization is not registered for the GST and the QST, it must file two rebate applications per fiscal year: one for the first six months and another for the last six months.

Under the GST system, an organization designated as a municipality may file its rebate application within four years following the last day of its claim period. In this example, the organization must first file, no later than December 31, 2013, a rebate application for the period from July 1, 2009, to December 31, 2009. It must then file separate rebate applications for each of the subsequent six-month periods.

In addition, if the organization designated as a municipality has already claimed a rebate as a charity or a non-profit organization for a period after July 1, 2009, it must, for its designated activities only, adjust the rebate application using the rebate rates of a municipality.

Under the QST system, an organization designated as a municipality is not entitled to any rebates pertaining to its designated activities before January 1, 2014.

Example 4

A non-profit organization that is registered for the GST and the QST files quarterly tax returns. It determined that it was a qualifying non-profit organization during its fiscal year ending December 31, 2013. The non-profit organization has never filed a rebate application. Can it apply for a rebate on the taxes paid on its purchases and expenses in the last four years?

The taxes paid or payable during a period when a non-profit organization was not entitled to the rebate cannot be carried to a rebate application for a period when the organization is entitled to a rebate. To claim a rebate of the taxes paid or payable during a previous period, the organization must determine whether it was a qualifying non-profit organization on the last day of the particular claim period or the last day of the fiscal year that includes that claim period.

If it determines that it was only a qualifying non-profit organization during its fiscal year ending December 31, 2013, the organization must file a separate rebate application for each quarter of 2013 in which it was entitled to the rebate.

For more information, see the Canada Revenue Agency's GST/HST Public Service Bodies' Rebate guide (RC4034).

Public Service Bodies' Rebate

mer, 10/25/2017 - 13:35

Many public service bodies (PSBs) are entitled to a PSB rebate of the GST and QST paid or payable on certain purchases and expenses. PSBs that have paid HST on purchases and expenses in a participating province may qualify for a PSB rebate of the HST paid.

Since January 1, 2014, municipalities (and organizations designated as a municipality) are entitled to a rebate of 62.8% of the QST paid on property and services acquired to make exempt supplies. The rebate mechanism is similar to that provided for under the GST system.

PSBs eligible for a rebate

A PSB may be eligible for a rebate if, on the last day of the claim period or on the last day of the fiscal year that includes that claim period, it is either

a charity;
a qualifying non-profit organization; or
a selected public service body.

Therefore, a PSB could be entitled to a rebate for some claim periods, but not for others.

Taxes that qualify for a rebate

The rebate claimed by a PSB is generally calculated based on the taxes that were payable, or that were paid without becoming payable, during the claim period. However, the following amounts do not give entitlement to the rebate:

any input tax credits and input tax refunds claimed by the PSB, or to which the PSB was entitled, for the taxes paid during that period;
any tax refunds, rebates or remissions that it is reasonable to expect the PSB received or was entitled to receive;
any amount of GST or QST that was refunded, credited, or adjusted in favour of the PSB and for which it has received a credit note from the supplier or has issued a debit note to the supplier.

The taxes payable during a given claim period cannot generally be claimed in the rebate application for a subsequent claim period. If a PSB has not claimed rebates for several periods, it must file a separate rebate application form for each period for which it is entitled to a rebate.

Rebate application forms

A PSB filing a rebate application for the first time must complete the GST/HST Rebate Application for Public Service Bodies(form FPZ-66-V) for the GST and the Application for a QST Rebate for Public Service Bodies(form VDZ-387-V) for the QST.

After we process the application, we will send the PSB personalized versions of the forms, which the PSB will be required to use for its next application.

Frequency of rebate applications

If the PSB is registered for the GST and the QST, it must apply for a rebate when it files its returns, whether it be on a monthly, quarterly or annual basis.

If the PSB is not registered for the GST and the QST, it must apply for a rebate twice a year: once for the first six months of its fiscal year, and a second time for the last six months.

Filing deadlines for the rebate

A PSB registered for the GST and the QST has four years from the due date of its GST and QST returns for a given claim period to file a rebate application. A PSB that is not registered for the GST and the QST has four years from the last day of the claim period to file a rebate application.

If a PSB has already claimed a rebate for a claim period and subsequently realizes that it could have claimed rebates for other amounts of tax for the same period, it must adjust the previously filed application by including the additional amounts of tax. It cannot include the amounts in the rebate application for a different claim period. Adjustments to applications must generally be made no later than four years after the date the applications were originally filed.

Example 1

A charity that is not registered for the GST and the QST pays GST and QST on purchases and expenses that qualify for a rebate throughout its fiscal year ending December 31, 2013. Can the charity file a single rebate application that covers the entire fiscal year?

As the charity is not registered for the GST and the QST, it must file two rebate applications per fiscal year: one for the first six months and another for the last six months. The charity must file one rebate application for the period from January 1, 2013, to June 30, 2013, and another for the period from July 1, 2013, to December 31, 2013. It must calculate its rebate based on the taxes paid or payable for each respective period.

Example 2

A charity that is registered for the GST and the QST files monthly tax returns. It always files rebate applications with its tax returns before the due date of the returns. In August 2013, the charity realized that it had not included an invoice dated April 24, 2013, in its April rebate application. The invoice showed a GST amount of $1,500 and a QST amount of $2,992. Can the charity include these amounts in its rebate application for the period from August 1, 2013, to August 31, 2013?

The taxes became payable during the period from April 1, 2013, to April 30, 2013. Therefore, the charity may only claim the rebate on the application for the period from April 1, 2013, to April 30, 2013. Since the charity had already filed its rebate application for that period, it must adjust that application rather than include the taxes in an application for a subsequent period.

Example 3

In July 2013, an organization that is not registered for the GST and the QST was designated as a municipality in respect of certain designated activities. The effective date of the designation is July 1, 2009. The fiscal year of the organization designated as a municipality ends on December 31. How can the organization claim a rebate of the taxes paid or payable since July 1, 2009?

Since the organization is not registered for the GST and the QST, it must file two rebate applications per fiscal year: one for the first six months and another for the last six months.

Under the GST system, an organization designated as a municipality may file its rebate application within four years following the last day of its claim period. In this example, the organization must first file, no later than December 31, 2013, a rebate application for the period from July 1, 2009, to December 31, 2009. It must then file separate rebate applications for each of the subsequent six-month periods.

In addition, if the organization designated as a municipality has already claimed a rebate as a charity or a non-profit organization for a period after July 1, 2009, it must, for its designated activities only, adjust the rebate application using the rebate rates of a municipality.

Under the QST system, an organization designated as a municipality is not entitled to any rebates pertaining to its designated activities before January 1, 2014.

Example 4

A non-profit organization that is registered for the GST and the QST files quarterly tax returns. It determined that it was a qualifying non-profit organization during its fiscal year ending December 31, 2013. The non-profit organization has never filed a rebate application. Can it apply for a rebate on the taxes paid on its purchases and expenses in the last four years?

The taxes paid or payable during a period when a non-profit organization was not entitled to the rebate cannot be carried to a rebate application for a period when the organization is entitled to a rebate. To claim a rebate of the taxes paid or payable during a previous period, the organization must determine whether it was a qualifying non-profit organization on the last day of the particular claim period or the last day of the fiscal year that includes that claim period.

If it determines that it was only a qualifying non-profit organization during its fiscal year ending December 31, 2013, the organization must file a separate rebate application for each quarter of 2013 in which it was entitled to the rebate.

For more information, see the Canada Revenue Agency's GST/HST Public Service Bodies' Rebate guide (RC4034).

Mortgage Broker Franchisee and Franchise Fees

jeu, 10/19/2017 - 14:43

A mortgage loan supplied by a mortgage lender to a borrower is an exempt financial service. When a mortgage broker provides an “arranging for” service in relation to the supply of the mortgage loan, the mortgage broker is also making an exempt supply of a financial service.

When a mortgage broker is a franchisee and is required to pay to the franchisor a portion of the revenue earned through its exempt activity as part of its franchise fee, the tax status of the franchise fee must be determined based on the franchise agreement.

Generally speaking, the franchisee pays franchise fees for the right to operate a franchise, which includes the right to use the name of the franchisor as an advertising tool and any systems made available by the franchisor to facilitate the operation of the franchise. The supply of such a right is a supply of incorporeal movable property (“intangible personal property” under the federal system).

Supplies of incorporeal movable property are generally taxable. If the franchisor is a GST and QST registrant, the franchisor is required to charge and collect GST and QST on the franchise fee payable by the franchisee for the property. If the franchisee is required to include in its franchise fee a percentage of its revenue earned through making exempt supplies of financial services, it is still required to pay GST and QST on the entire franchise fee payable to the franchisor.

The agreement between a franchisor and a franchisee may provide that the franchise fee also includes a percentage of any incentive payments paid to the franchisee by a mortgage lender. For example, a mortgage broker franchisor may enter into an agreement with a mortgage lender which provides for incentive payments to be paid by the lender to the franchisee when certain sales volumes are reached. If a percentage of these incentive payments forms part of the franchise fee, the franchisee is still required to pay GST and QST on the entire franchise fee payable to the franchisor.

Furthermore, if the mortgage lender sends a franchisor the total amount of all the incentive payments earned by the franchisor's franchisees with instructions on how to divide the lump sum incentive payment between the franchisees and the franchisor retains an amount that corresponds to each franchisee's franchise fee, the portion of the incentive payment retained by the franchisor as part of the franchise fee is still subject to the GST and QST, which is payable by the franchisee.

For more information on financial services, refer to GST/HST Technical Information Bulletin B-105, Changes to the Definition of Financial Service.

Recognized National Arts Service Organization

mer, 09/06/2017 - 09:13

An arts service organization can register as a recognized national arts service organization (RNASO) for the purposes of the Income Tax Act and the Taxation Act.

For GST and QST purposes, a RNASO is not considered a charity because it is not a registered charity or a registered Canadian amateur athletic association under the Income Tax Act or the Taxation Act. A RNASO is also not a public institution (This link will open a new window).

However, a RNASO can be considered a non-profit organization (NPO) for GST and QST purposes. An NPO is an entity (other than a succession, trust, charity, public institution, municipality or government) that meets the following conditions:

It is organized and operated solely for non-profit purposes.
No portion of its income is payable to its proprietors, members or shareholders, or made available to them for personal gain, unless the proprietor, member or shareholder is a club or an association whose primary purpose is to promote amateur athletics in Canada.

For more information, see GST/HST Policy Statement P-215, Determination of whether an entity is a "non-profit organization" for purpose of the Excise Tax Act ("ETA").

For more information about how the GST and QST apply to NPOs, including the rebate that public service bodies can claim as a qualifying NPO, see document IN-229-V, The QST and the GST/HST: How They Apply to Non-Profit Organizations.

Use of the Territorial Designation of the Northern Plan in the Various Tax Measures Specific to the Mining Sector

mer, 05/31/2017 - 10:02

To ensure that the territorial designations assigned to the Northern Plan territory and those used in the Taxation Act and the Mining Tax Act are harmonized, the concept of Near North to which these two statutes refer will be modified to enlarge its territory southward, while the concept of Far North to which these two statutes also refer will remain unchanged.