Canada: Large businesses may claim all QST; phaseout of input tax refund restrictions (Quebec)
Canada: Large businesses may claim all QST
Quebec has fully phased out its input tax refund (ITR) restrictions as of 1 January 2021. As a result, certain large businesses may now claim 100% of the Quebec sales tax (QST) that becomes payable on goods and services that were previously subject to the ITR restrictions as of 1 January 2021 (up from 75%).
Affected businesses may need to adjust certain accounts in their systems and calculations that are related to the property and services that were subject to the ITR restrictions. These adjustments may include:
- Accounts related to purchases and leases of certain vehicles
- Common area maintenance charges
- Employee expense accounts
In addition, large businesses that qualify to claim ITRs will need to review when the tax became payable (i.e., before or after 1 January 2021) in order to determine whether they can claim an ITR of 100% or 75% of the QST payable. These businesses need to consider whether all the required changes were made for the previous three phase-out periods, and determine if they have missed any related ITRs over the last three years.
Read a January 2021 report prepared by the KPMG member firm in Canada
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.