Revenu Québec Infos

On June 4, 2014, the Minister of Finance announced that the rates of the specific tax on alcoholic beverages would be standardized as of 6 a.m. on August 1, 2014. As a result, the rates applicable to alcoholic beverages sold for home consumption (for example, at a grocery or convenience store) will increase, while the rates applicable to alcoholic beverages sold for consumption on the premises (for example, in a restaurant or bar) will decrease.

Businesses selling alcoholic beverages on which the specific tax was (or should have been) collected in advance must take inventory of all the alcoholic beverages they have in stock at 6 a.m. on August 1, 2014.

Alcoholic beverages sold for home consumption

Businesses that are required to take inventory and that sell alcoholic beverages for home consumption must, no later than August 29, 2014, file form VDZ-505-V, Alcoholic Beverage Inventory, and pay an amount equal to the difference between the specific tax applicable at the new rate and that applicable at the rate in effect before 6 a.m. on August 1, 2014.

Alcoholic beverages sold for consumption on the premises

Businesses that are required to take inventory and that sell alcoholic beverages for consumption on the premises must file form VDZ-505-V no later than October 31, 2014, if they are claiming a refund.

Note

Any business that files form VDZ-505-V after October 31, 2014, will not be entitled to a refund.

For more information, click Standardization of the Rates of the Specific Tax on Alcoholic Beverages.

Tax legislation will be amended to provide that, as of the 2015 taxation year, the tax credit for workers 65 or older will be calculated on the worker's first $4,000 of eligible work income in excess of the first $5,000 of such income.

For more information, see page 25 of the Additional Information on the Fiscal Measures of the Budget (PDF – 795 KB) tabled by the Ministère des Finances on June 4, 2014.

On January 1, 2014, a new policy came into effect respecting insufficient Québec Pension Plan (QPP) contributions or insufficient Québec parental insurance plan (QPIP) premiums. Under the new policy, if we observe that you, as an employer, have calculated such amounts incorrectly, we can, under certain circumstances, make the necessary corrections without communicating with you beforehand. Where such corrections are made, we will send you a notice of assessment showing the details of the corrections.

If the data in your file does not allow us to make the corrections, we will send you a Statement of Employee and Employer QPP Contributions (form LMU-141-V) or a Statement of Québec Parental Insurance Plan Premiums (form LMU-150-V) for you to complete.

For more information about QPP contributions and QPIP premiums, see the Guide for Employers (TP-1015.G-V).

Note that the new policy is one of many efforts being made by Revenu Québec to reduce the administrative burden on businesses.

Between April 7 and May 29, 2014, a number of mandataries were mistakenly sent form FPZ-2034.3-V, Online Filing of the GST/HST and QST Returns, or form FPZ-34.3-V, Online Filing of the GST/HST Returns. Even though the forms instructed them to file their returns online, they can in fact do so on paper using form FPZ-500-V, GST/HST – QST Return, or form FPZ-34-V, GST/HST Return.

To correct the error, we will send the mandataries in question the proper forms (FPZ-500-V or FPZ-34-V) so that they can file their returns for the month of May on paper.

Mandataries that have already filed their return for the period in question can disregard the notice and destroy the form.

The source of the error has been corrected. Mandataries will receive their next return at the usual time.

The Minister of Finance today announced an increase in the tobacco tax. The increase is effective as of 12:01 a.m. on June 5, 2014.

Retail dealers and collection agents that, at 12:01 a.m. on June 5, 2014, have tobacco products in stock on which they paid (or should have paid) an amount equal to the tobacco tax must take inventory of those products at that time. They must then remit, no later than July 4, 2014, an amount equal to the difference between the tobacco tax applicable at the new rate and the tax applicable at the rate in effect before June 5, 2014.

A copy of form TAZ-7.12-V, Inventory of Tobacco Products in Stock, which includes a remittance slip, will be mailed to retail dealers and collection agents on June 5, 2014. If you sell tobacco products and you do not receive a copy of the form, please contact Revenu Québec.

For more information, click Increase in the Tobacco Tax.

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.

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.

A new refundable tax credit for households that renovate their home, expand it, adapt it to the special needs of a family member or convert it into an intergenerational house has been implemented on a temporary basis.

This new credit is intended for individuals who are homeowners and who hire a qualified contractor to carry out renovation work on their principal residence under a contract entered into after April 24, 2014, and before July 1, 2015.

The amount of the tax credit corresponds to 20% of the portion of an individual's eligible expenses that exceeds $3,000, up to a maximum tax credit of $2,500.

To qualify for the tax credit, the work done must essentially cover the living space of the home as well as its exterior siding and roofing. What's more, to encourage households to incorporate eco-friendly work into their home renovation projects, all work recognized for the purposes of the EcoRenov tax credit and carried out under a contract entered into after October 31, 2014, will be recognized for the purposes of the LogiRénov tax credit.

A form for claiming the tax credit, which individuals will have to file along with their income tax return, will be available with the 2014 income tax return documents. In addition, contractors that carried out eco-friendly renovation work under the LogiRénov home renovation tax credit will have to certify that the materials and appliances involved comply with recognized energy and environmental standards. To do so, the contractor will have to complete and sign a Certificate of Compliance With Energy and Environmental Standards (form TP-1029.ER.A-V) and give it to his or her client. 

For more information, click LogiRénov.

Are you involved in electronic commerce? Do you actively speculate on the stock market? Do you repeatedly sell your personal residences? If you engage in such activities with a view to making a profit, we consider that you are carrying on a business. Any income from such a business must be reported as business income, not as capital gains.

For more information, see the publication Business and Professional Income (IN-155-V).

Capital régional et coopératif Desjardins (CRDC) can play a significant role in financing businesses in Québec regions ranking lowest in recent years on the economic development index used by the Ministère des Finances et de l'Économie du Québec (whether or not the regions in question are resource regions). To take into account this significant role, various changes will be made to CRDC's constituting act.  

For more information, see page I.3 of the Budget Plan (PDF – 4,45 MB) tabled by the Ministère des Finances et de l'Économie.

The annual threshold of $50,000 will be replaced with a single threshold of $50,000. Tax legislation will be amended so that the single threshold of $50,000 applicable to a corporation for a taxation year corresponds to the qualified expenditures incurred by the corporation, in the taxation year or a prior taxation year, and to its share of the qualified expenditures incurred by a qualified partnership of which it is a member, for a fiscal period ended in the taxation year or a prior taxation year of the corporation, and that total $50,000.

A corporation will be entitled to the tax credit for a taxation year only if the single threshold of $50,000 for the year is reached.

This change applies to any corporation's taxation year that ends after February 20, 2014.

For more information, see page I.11 of the Budget Plan (PDF – 4,45 MB), tabled by the Ministère des Finances et de l'Économie.

A death benefit from the Québec Pension Plan or the Canada Pension Plan is not to be included in the income of a deceased person. For information on how to report such a benefit, see the instructions for line 119 of the income tax return.

Do you make maple products? If you would like to know whether or not the GST and QST apply to the sale of your products and should be collected, click Maple Products.

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)

Many public service bodies (This link will open a new window) (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 (This link will open a new window) 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 (This link will open a new window);
• a qualifying non-profit organization (This link will open a new window); or
• a selected public service body (This link will open a new window).

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).

Since July 3, 2013, any person who files paper RL slips has been required to distribute only copy 2 of the slips to the persons for whom the slips are being filed (the "recipients").

However, this new measure does not apply to RL-14 slips (see courtesy translation RL-14-T) filed on paper. Distribute copies 2 and 3 of such slips to the recipients.

If you distribute RL slips to recipients electronically, you must obtain their prior consent (in writing or electronically). In such cases, provide each recipient with only one copy of the electronic slip.

Pooled registered pension plan

A pooled registered pension plan (PRPP) administrator must file RL-2 slips (see courtesy translation RL-2-T) to report any amount paid (including amounts from which a source deduction was made) during the year to persons who were resident in Québec on December 31 of the year concerned, or who were resident in Québec immediately before ceasing to reside in Canada during the year concerned.

However, a PRPP administrator must not use an RL-2 slip to report

• the total of the transferable payments of a PRPP made directly to
  • another PRPP, a registered pension plan (RPP), a registered retirement savings plan (RRSP), a registered retirement income fund (RRIF) or a deferred profit-sharing plan (DPSP) in the name of the annuitant or in the name of the annuitant's spouse,
  • a licensed annuities provider for the acquisition of a qualifying annuity;
• the value of property transferred directly from a RRIF, an RRSP, an RPP or a DPSP to a PRPP in the name of the same annuitant.

For more information, contact us.

Additional information

The following changes were made to the additional information related to the RRIF:

• Code B-1 was changed from "Amount exceeding the minimum amount" to "Payment from a RRIF exceeding the minimum amount"
• Code B-2 was changed from "Excess amount transferred in whole or in part" to "Payment from a RRIF that was transferred"
• Code B-3 was changed from "Designated benefit" to "Designated benefit exceeding the minimum amount"

In calculating the taxable benefits related to the use of an automobile or the automobile expenses that can be deducted for income tax purposes, you must take into account certain limits and prescribed rates. The limits and rates for 2014, which are the same as those for 2013, are listed below:

• For purposes of capital cost allowance (CCA), the ceiling on the capital cost of passenger vehicles is $30,000 (plus GST and QST) for vehicles purchased after 2013.
• The limit on deductible leasing costs is $800 per month (plus GST and QST) for leases entered into after 2013. Under a separate restriction, deductible leasing costs are prorated where the value of the passenger vehicle exceeds the capital cost ceiling.
• The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes remains 54 cents per kilometre for the first 5,000 kilometres and 48 cents for each additional kilometre.
• The maximum allowable interest deduction for amounts borrowed to purchase a passenger vehicle is $300 per month for loans related to vehicles acquired after 2013.
• The prescribed rate used to determine the taxable benefit respecting the portion of operating expenses which relates to an employee's personal use of an automobile provided by the employer remains 27 cents per kilometre. For taxpayers employed principally in selling or leasing automobiles, the prescribed rate remains 24 cents per kilometre.

Note

The following is an interim administrative position that is under review. It provides a description of rules that are currently in place.

Residential elevator

The supply of an elevator installed in the residence of an individual who uses a wheelchair is zero-rated (that is, taxable at the rate of 0%) if the elevator is a wheelchair lift or similar aid to locomotion that is specially designed to be operated by an individual with a disability for his or her locomotion. 

For the supply of a residential elevator to be zero-rated, the elevator must be designed to accommodate an individual using a wheelchair and have a sufficient number of the following features so as to distinguish itself from an ordinary elevator:

• The width of the platform is set to accommodate the turning radius of a wheelchair (unless it is a flow through elevator).
• The clearance between the landing edge and the platform is appropriately set to prevent the wheelchair from getting caught.
• Accessibility to the operating control panel and call stations is adjusted for an individual in a wheelchair.
• The elevator contains:
  • appropriate handgrips or handrails for use by an individual in a wheelchair
  • anti-skid or similar flooring
  • key-controlled continuous pressure buttons
• Flush mount door and floor frames are installed allowing for easy entry and exit from the cab.
• Accordion doors are removed and light curtains or similar closure are installed.
• Two to five levels are served.
• The maximum capacity is 454 kg (1,000 lbs).

Installation service and parts

If the supply of a residential elevator is zero-rated, its installation is also zero-rated. However, services that are related to, or that accommodate the installation of, the residential elevator are taxed at 5% under the GST and 9,975% under the QST. For example, a service of installing a residential elevator does not include architectural services, delivery services, demolishing services and construction and renovation services of the home, including services relating to renovating an area in or adjacent to the home (for example, a hallway or a garage) to accommodate the elevator.

However, the parts required for the installation of the elevator (for example, a hoistway) are zero-rated when supplied in conjunction with the installation service.

Refund of taxes paid in error

Under this interim administrative position, a supplier can refund or credit clients for amounts of GST and QST collected and remitted in error on zero-rated supplies. Alternatively, individuals can apply to Revenu Québec for a rebate of the taxes paid in error, provided that the application is made within two years of the date on which the taxes were paid.  

Suppliers are required to retain documentation proving that the elevator has some of the features listed above and is therefore zero-rated. Individuals applying for a rebate of taxes paid in error on a residential elevator must provide documentation proving that the elevator has some of the features listed above. No rebate will be issued for taxes paid on residential elevators that do not have these features.

To apply for a rebate of consumption taxes paid in error, complete forms FP-189-V General GST/HST Rebate Application, and VD-403-V, General Application for a Québec Sales Tax (QST) Rebate, and send them to Revenu Québec. For more information, consult the Guide to the General GST/HST Rebate Application (FP-189.G-V).

Beginning 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.

The 62.8% QST rebate applies to supplies of property and services for which the QST became payable after December 31, 2013, and was paid after that date.

For information on which municipal entities are eligible for the rebate or on the changes to the QST system, see information bulletin 2013-12, published on December 2, 2013, by the Ministère des Finances et de l'Économie.

For examples of situations in which the rebate may or may not apply, click QST Rebate for Municipalities and Organizations Designated as a Municipality.