News and Insights

Quebec Updates QST Mathematical Factors and Remittance Rates

Tax Development Oct 31, 2012

On January 1, 2013, the rate of QST will increase to 9.975% from 9.5 % due to the announcement of the further harmonization of the QST with the GST. This change in the QST rate will impact several mathematical factors and QST remittance rates that are used by business registered for QST. The changes in these factors and remittance rates are summarized below.

For QST purposes, the large business simplified method (LB simplified method) is available to large businesses to extract the QST incurred in Québec from an expense report containing expenses that relate exclusively (90% or more) to taxable, other than zero-rated, supplies.  The LB simplified percentage is currently 5% and will remain unchanged effective January 1, 2013, despite the modest QST rate increase.  However, the factor that is available for use on an allowance paid to an employee, partner or volunteer where the allowance relates to expenses incurred in Québec (other than those subject to the ITR restrictions for large businesses) will increase to 9.975/109.975 from 9.5/109.5.

With the notable exception of large businesses that are not generally permitted to recover QST paid on automobile related costs, QST registrants providing taxable benefits in 2013 (including the automobile standby charge benefit for employees in Québec), are generally required to remit QST attributable to these benefits at 9.975/109.975.  In the case of automobile operating cost benefits provided by an employer in 2013, the benefit amount will be multiplied by 6.0% to determine the QST amount to be remitted.  The QST attributable to taxable benefits provided to employees in 2013 must be remitted in the employer’s QST return that includes the last day of February 2014. Further details regarding the available QST mathematical factors and remittance rates are available in the following documents:

Quebec Mathematical factors Quebec 
Remittance Rates – Taxable Benefits