News and Insights

Quebec Discusses Acquisition or Improvement of an Immovable by a PSB

Tax Development Mar 31, 2015

If a public service body (“PSB”) acquires or improves capital property used more than 50% in its commercial activities, it may be eligible to claim input tax credits (“ITCs”) and input tax refunds (“ITRs”) in respect of GST and QST paid.  However, if the percentage of use does not meet this threshold (but is used more than 10% in commercial activities), an election may be filed to treat the immovable as a taxable supply, and therefore make the PSB eligible to claim the corresponding portion of the ITCs and ITRs.  If the election is made, the PSB must collect tax on its supplies.

In order to make the election, Form FP-2626-V must be completed and filed with Revenue Quebec.  For more information, please refer to Revenue Quebec’s webpage.