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Phasing Out of Restrictions on Input Tax Refunds for Large Businesses for the Period January 1, 2018, to December 31, 2020

For the years prior to 2021, as a registrant, you had to determine whether you were a small or medium-sized business (SMB) or a large business.

You were generally considered to be a large business for a given fiscal year if your and your associates' taxable sales made in Canada exceeded $10 million during the last fiscal year that ended before the given fiscal year. If the last fiscal year was shorter than 365 days, the value of the taxable sales for that year had to be adjusted on the basis of a one-year period.

Your taxable sales made in Canada included the following:

  • the value of all exports;
  • sales deemed to have been made outside Canada;
  • sales deemed to have been made for nil consideration.

Sales could be made for nil consideration pursuant to a joint election made by corporations that were specified members of a group of closely related corporations. The amount of your taxable sales made in Canada did not include:

  • GST;
  • amounts from the sale of real property that was capital property;
  • amounts from the sale of the goodwill of a business where no QST was payable on the sale.
Note Important

The following businesses and related persons are considered large businesses, regardless of the value of their taxable sales:

  • banks
  • trust companies
  • credit unions
  • insurers
  • investment plans
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Goods and services that do not give entitlement to ITRs

The following goods and services did not give entitlement to input tax refunds (ITRs) if they were acquired by a large business:

  • road vehicles under 3,000 kilograms that must be registered under the Highway Safety Code to be driven on public roads;
  • goods and services relating to such vehicles, where the goods or services were acquired in Québec or brought into Québec within 12 months following the date on which the vehicle was acquired in, or brought into, Québec;
  • fuel, other than fuel oil, used to supply the engine of such vehicles;
  • electricity, gas, steam or combustibles, except when used to produce personal property intended for sale;
  • telephone services and other telecommunications services, except Internet access services and “1 800”, “1 888” and similar numbers; and
  • food, beverages and entertainment that were only 50% deductible under the Taxation Act.


In general, new registrants did not have to determine whether the taxable sales made during the last fiscal year exceeded $10 million unless:

  • the business was a corporation resulting from an amalgamation, in which case, the value of the taxable sales made by each predecessor corporation had to be taken into account;
  • the business was carried on by a person that did not reside in Québec, in which case, the value of the taxable sales that the person made elsewhere in Canada had to be taken into account.

If a large business acquired control of an SMB during the SMB's fiscal year, the SMB (and any related corporation) retained its status as an SMB until the end of its current fiscal year, but it (and any related corporation) was considered a large business as of the beginning of the following fiscal year.

A member of a partnership (other than an individual) was deemed to be an SMB or a large business based on whether the partnership itself was an SMB or a large business.

Phasing out of ITR restrictions

The phasing out of ITR restrictions for large businesses began on January 1, 2018.

As a result, large businesses can claim ITRs for goods and services subject to the restrictions, at a rate of:

  • 100% for 2021 and subsequent years;
  • 75% for 2020; 
  • 50% for 2019; 
  • 25% for 2018. 

As of January 1 of each of these years, the QST that becomes payable on acquisitions of goods and services to which the restrictions apply may be included in the calculation of a large business's ITRs, at the applicable rate for the year in question.

For more information about the gradual phasing out of ITR restrictions for large businesses, see the information bulletin Particulars regarding the phasing out of the ITR restrictions applicable to large businesses that is to begin on January 1, 2018 (TVQ. 206.1-10) [withdrawn and archived] on the Publications du Québec website.

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