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Canada: Quebec to harmonize with proposed GST/HST rules for holding corporations

Canada: Quebec to harmonize with proposed GST/HST rules

Quebec announced new harmonization measures to align two Quebec sales tax (QST) measures with proposed changes to federal goods and services tax / harmonized sales tax (GST/HST) legislation. A third tax measure would relate to education savings plans.


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Holding corporation rules extended to holding partnerships and trusts

The Quebec release states that the amended provincial QST rules will harmonize with the federal proposal to extend the GST/HST holding corporation rules to holding partnerships and trusts. Read more about the federal draft legislation: TaxNewsFlash

Other measures

Quebec will also increase the de minimus threshold for non-taxable imports to $40* (from $20) for goods imported from Mexico (related to the implementation the U.S.-Mexico-Canada Agreement (USMCA)).

Finally, Quebec is harmonizing certain Quebec education incentive rules with amendments to the Canada education savings regulations.

*$=Canadian dollar

Effective dates

The release from Quebec notes that the provincial QST changes will be adopted only after the federal GST/HST changes receive Royal Assent, and will generally have the same effective dates as under the federal legislation.

The harmonization of the Quebec education incentive rules will generally apply as of September 1, 2019 (the same date as the federal changes).

Read a July 2019 report prepared by the KPMG member firm in Canada

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