The National Assembly of Québec has introduced Bill 117 which amends various legislation to give effect to measures announced in the Budget Speech delivered on March 30, 2010. Included in the amendments are changes to the Act respecting the Québec sales tax to incorporate the harmonization measures announced in Information Bulletins published by the Ministère des Finances in 2009. More specifically, the amendments include revised place of supply rules for services and intangible personal property (incorporeal movable property) and the rules to determine a taxpayer’s head office.
These rules apply in respect of supplies made after April 30, 2010 and after February 25, 2010 and before May 1, 2010 unless a part of the consideration for the supply becomes due or is paid before May 1, 2010. At the present time, Bill 117 is at the presentation stage and has not received assent. The amendments to the Act respecting the Québec sales tax are found on pages 76 to 89 of the document linked below.
For services, draft section 22.15.0.1 of the Act states that a supply of a service is deemed to be made in Québec if, in the ordinary course of business, the supplier obtains an address in Québec that is:
- a home or business address in Canada of the recipient;
- where more than one home or business address in Canada is obtained, the home or business address that is most closely connected to the supply (“the contracting address”); or
- in any other case, the address in Canada of the recipient that is most closely connected with the supply.
Where the supplier does not obtain an address in Canada of the recipient, a supply of a service will be deemed to be made in Québec if the Canadian element of the service is performed primarily (more than 50%) in Québec.
The place of supply rules for intangible personal property and whether the supply is made in Québec are dealt with in draft sections 22.11.1 to 22.11.4.
QC Bill 117