Fact Sheet for selected listed financial institutions (SLFIs) and financial institutions that would be SLFIs if Quebec were a participating province

The QST rate will increase from 9.5% to 9.975% starting on January 1, 2013

Beginning on January 1, 2013, the Quebec sales tax (QST) will apply directly to the sale price rather than to the sale price plus the goods and services tax (GST). The QST rate will be adjusted accordingly, increasing from 9.5% to 9.975%. However, this adjustment will not change the total amount of an invoice, as shown in the following example:

Changes to the QST system for financial institutions in Quebec

With the implementation of the changes to the QST system, supplies of financial services that are zero-rated under Quebec tax law prior to January 1, 2013, will, as a general rule, be exempt starting on January 1, 2013, as is the case under federal tax law.

So, starting on January 1, 2013, goods and services that suppliers of financial services acquire for the sole purpose of providing exempt financial services will not be eligible for an input tax refund (ITR).

Transitional rules will facilitate this change. Information Bulletin 2012, issued by Quebec's ministère des Finances et de l'Économie on May 31, 2012, and available on its Web site, discusses these rules and provides important information, such as:

• Change in use rules for capital property are described and have been adapted to avoid costs related to changes in use on December 31, 2012.
• Reporting periods that begin on January 1, 2013, for SLFIs registered for the QST will end on the same date as the SLFI's GST/HST reporting period.

If a SLFI has a QST reporting period that includes January 1, 2013, that reporting period will end on December 31, 2012. The financial institution will then have a new reporting period that will begin on January 1, 2013, and end on the same date as its GST/HST reporting period.

Note that for SLFIs whose QST and GST/HST amounts collected will be administered by the Canada Revenue Agency (CRA) starting on January 1, 2013, Revenu Québec will automatically close their QST account effective December 31, 2012. However, these SLFIs will have access to their account history. Read the section below called "Use of the business number to register financial institutions for GST/HST and QST purposes."

• The compensation tax will be eliminated on January 1, 2013. However, as announced in the Quebec budget on November 20, 2012, the part of the compensation tax that results from the temporary rate increase introduced in the 2010-2011 Quebec budget will continue to apply until March 31, 2019, and will increase as of January 1, 2013.
• Instalment payments of provincial tax that a corporation makes after January 1, 2013, may be adjusted according to the usual rules to reflect the effects of the partial elimination of the compensation tax.
• The QST rebate rate for registered pension plan entities will be the same as the GST/HST rate. The rate will be 33%.
• To calculate their eligible ITR for any reporting period beginning after December 31, 2012, financial institutions must use the same allocation methods they use to calculate their eligible input tax credits (ITCs).
• Registered financial institutions with more than $1 million in annual revenue will generally have to file an annual information return for the QST, as is the case currently for the GST/HST. This return will have to be filed within six months of the end of their fiscal year for fiscal years beginning after December 31, 2012.

On November 14, 2012, the Quebec Minister of Finance and the Economy, Mr. Nicolas Marceau, tabled Bill 5, an Act to amend the Act respecting the Quebec sales tax and other legislative provisions, in the National Assembly. Bill 5 was assented to on December 7, 2012.

For information about these changes or about the QST rate in effect on January 1, 2013, visit the Revenu Québec Web site or contact Revenu Québec client services at 1-800-567-4692.

Use of the business number to register financial institutions for GST/HST and QST purposes

• Starting on January 1, 2013, the CRA will administer the QST on behalf of Revenu Québec, and the GST/HST for SLFIs that do business in Quebec using the GST/HST business number. These SLFIs will be required to report directly to the CRA the QST and GST/HST amounts they collect, and to fill out a new reporting form designed for that purpose, which will be available soon.
  
  
• If you have already registered for the GST/HST and you are located outside Quebec but do business in Quebec, you will also need to register for the QST. In this case, contact the CRA to update your account.
  
  
• If you do business in Quebec and want to register for the GST/HST and the QST, contact the CRA.
  
  
• For information about the GST/HST, contact the CRA as follows:
  
  
  • For GST/HST account-related enquiries or to register for a CRA business number, call 1-800-959-5525;
  • For technical GST/HST enquiries, call 1-855-666-5166.
    
    
• Starting on January 1, 2013, the CRA will also respond to questions on the administration of the QST as it applies to SLFIs and financial institutions that would be SLFIs if Quebec were a participating province.

Date modified:

2013-11-26