Deposits

The GST/HST and the QST are not applied to a deposit. The GST/HST and the QST are calculated on the deposit only if the supplier applies the deposit as partial payment of the sale price of a good or service.

Forfeited deposits

If the customer forfeits the deposit by not purchasing the item or service, taxes are considered to be included in the deposit.

Calculation of the GST and the QST

To determine the GST to be remitted on the forfeited deposit, multiply the amount of the deposit by 5/105.

To determine the QST to be remitted, multiply the amount of the deposit by 9.975/109.975.

Calculation of the HST

To determine the HST to be remitted on a forfeited deposit in a participating province, multiply the amount of the deposit by the fraction shown in the table below.

Fractions to use in provinces where the HST applies
Province Fraction
New Brunswick 15/1151
Newfoundland and Labrador 15/1152
Nova Scotia 15/115
Ontario  13/113
Prince Edward Island 15/1153
  1. Fraction to be used for forfeited deposits as of July 1, 2016. The fraction to be used for forfeited deposits before that date is 13/113.
  2. See note 1.
  3. Fraction to be used for forfeited deposits as of October 1, 2016. The fraction to be used for forfeited deposits before that date is 14/114.

Customers who are registrants may claim an input tax credit (ITC) and an input tax refund (ITR) for the taxes deemed to have been paid on the forfeited deposit if they have supporting documents.

Example

A customer pays a deposit of $50 to reserve a television set for purchase, but later decides not to buy the item. The deposit is therefore forfeited. Revenu Québec considers that you have collected GST and QST equal to 5/105 and 9.975/109.975, respectively, of the forfeited deposit. As a result, you must remit to Revenu Québec $2.38 in GST ($50 × 5/105) and $4.54 in QST ($50 × 9.975/109.975). If the customer is a registrant, an ITC of $2.38 and an ITR of $4.54 can be claimed in most cases.
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