Exchange of Used Road Vehicles Between Individuals

GST does not apply if:

• the vendor is an individual who is a GST or QST non-registrant
• the vendor is an individual who is a GST and QST registrant but did not use the vehicle exclusively in the course of his or her commercial activities

QST is collected by the Société de l'assurance automobile du Québec (SAAQ) from each purchaser on the higher of the following amounts:

• the estimated value (This link will open a new window) of the vehicle acquired
• the selling price of the vehicle acquired

Related individuals

If a used road vehicle is transferred between related individuals (This link will open a new window) for a price that is lower than the estimated value (transaction with or without consideration), the QST is calculated on the agreed selling price.

Unrelated individuals

If a sale between two unrelated individuals who are non-registrants involves the exchange of two or more vehicles, Revenu Québec issues a Certificate Respecting the Non-Payment or Collection of the Québec Sales Tax (QST) on the Supply of a Road Vehicle (VDE-23-V) to indicate that the QST will be collected on the higher of the following amounts:

• the selling price of the vehicle acquired, which corresponds to the estimated value of the vehicle given in exchange
• the estimated value of the vehicle that was acquired

However, if the estimated value of the vehicle given in exchange is lower than the fair market value (This link will open a new window), the consideration is the fair market value of the property given in exchange.

Example

Mr. Lévesque owns a sedan that has an estimated value of $6,000. Mr. Girard owns a station wagon that has an estimated value of $10,000. Mr. Lévesque and Mr. Girard are unrelated individuals. They decide to exchange vehicles.

Mr. Lévesque acquires the station wagon. He must pay QST with regard to this vehicle on the higher of the following amounts:

• the estimated value of the vehicle that was acquired ($10,000)
• the estimated value of the vehicle given in exchange ($6,000)

Mr. Lévesque must pay QST on the estimated value of the vehicle that was acquired ($10,000).

Mr. Girard acquired the sedan. He must pay QST with regard to this vehicle on the higher of the following amounts:

• the estimated value of the vehicle that was acquired ($6,000)
• the estimated value of the vehicle given in exchange ($10,000)

Mr. Girard must pay QST on the estimated value of the vehicle given in exchange ($10,000).