Sales of Incorporeal Movable Property

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In general, the sale of incorporeal movable property (intangible personal property) is considered to be made in Québec if the part of the property that can be used in Canada can only be used primarily (more than 50%) in Québec. The sale of incorporeal movable property is considered to be made outside Québec if the part of the property that can be used in Canada can only be used primarily outside Québec.

In all other cases, the sale of incorporeal movable property that can be used in Québec is considered to be made in Québec if the value of the property is $300 or less and the sale is made from a permanent establishment of the supplier situated in Québec to an individual that is the purchaser or is acting on behalf of the purchaser. In addition, the sale of incorporeal movable property that can be used in Québec is considered to be made in Québec if the supplier obtains an address of the purchaser in Québec that is one of the following:

  • the home address or the business address of the purchaser in Canada, if the supplier obtains only one address;
  • the address most closely connected with the supply, if the supplier obtains multiple home addresses of the purchaser or the business address of the purchaser in Canada; or
  • the address of the purchaser in Canada that is most closely connected with the supply, if the supplier obtains neither the home address nor the business address of the purchaser in Canada.

Special rules provide that the sale of incorporeal movable property relating to immovable property (real property) is considered to be made in Québec if the immovable property is situated in Québec. Likewise, the sale of incorporeal movable property relating to corporeal movable property (tangible personal property) is considered to be made in Québec if the corporeal movable property is situated in Québec.

Examples
  • A Québec registrant licences software to a Québec business for use by the employees of the head office situated in Québec. The software is downloaded online. The licence stipulates that the software can be used only in the business's head office.

    The sale of the property is considered to be made in Québec because the part of the property that can be used in Canada can only be used primarily (more than 50%) in Québec.

  • The same Québec registrant licences software to a Québec business for $500. The software will be used by the employees of the business's offices in Québec and New Brunswick. The software is downloaded online. The licence stipulates that the software can be used only in the offices in Québec and New Brunswick. In the ordinary course of its business, the registrant obtains only one address of the business (the address of the office in Québec) and uses that address for billing.

    The supply is considered to be made in Québec because the part of the property that can be used in Canada is not only for use primarily in a specific province and the supplier obtained only one address of the purchaser (the address of the office in Québec).

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