As previously announced in the 2010 Budget, Revenu Québec has finally released the factors and percentages that may be used by QST registrants to calculate input tax refunds on reimbursements to employees, partners or volunteers, in light of the announced QST rate increases to 8.5%, effective January 1, 2011, and to 9.5%, effective January 1, 2012.Large businesses may use a specified percentage applied to the amount of the expenses being reimbursed or allowances paid to employees, members or volunteers. This method, which was formerly referred to as the “4.1% method”, has been renamed the “LB simplified method”. For expenses incurred after December 31, 2010 and before January 1, 2012, the specified percentage will be 4.5%, increasing to 5% for expenses incurred after December 31, 2011.
In addition, a specified factor may be applied to calculate input tax refunds on reimbursed expenses for small and medium-sized businesses (SMBs), as well as the partial rebates available to charities, qualifying non-profit organizations and selected public service bodies. Currently, this method is known as the “7/107th method”, and will now be referred to as the “SMB simplified method”. For expenses incurred after December 31, 2010 and before January 1, 2012, the SMB simplified factor will be 8/108, increasing to 9/109 for expenses incurred after December 31, 2011.
QC News Release Reimbursement of Expenses