1% Rate Reduction

If you use the Quick Method of Accounting as of the first day of your fiscal year, or as of your GST and QST registration date, you may apply a 1% rate reduction to a portion of your taxable supplies (excluding zero-rated supplies). For GST purposes, the 1% reduction applies to the first $30,000 of your taxable supplies (including GST) made during each fiscal year. For QST purposes, the 1% reduction applies to the first $31,421 of your taxable supplies (including QST) made during each fiscal year.

If you file monthly or quarterly returns, the 1% reduction applies to your supplies made during the first reporting period and subsequent reporting periods in the fiscal year, until the fiscal year ends or until the amount of sales reaches $30,000 (including GST), for GST purposes, and $31,421 (including QST), for QST purposes.

If you file an annual return, for GST purposes, the 1% reduction applies to the first $30,000 of supplies (including GST) and, for QST purposes, the first $31,421 of supplies (including QST) made during the fiscal year.

If your total supplies in any fiscal year are under $30,000, for GST purposes, and $31,421, for QST purposes, the unused amount cannot be carried forward.

Example of how to calculate the 1% rate reduction

A dry cleaning business that has elected to use the Quick Method of Accounting is eligible for the 1% rate reduction. After calculating the tax amounts for the first quarter using the 3.6% rate for the GST and the 6.6% rate for the QST, the business operator calculates the 1% rate reduction to determine the final amounts to be remitted to Revenu Québec.

GSTQST
Taxable supplies for the quarter (GST included)$21,000.00
Taxable supplies for the quarter (QST included)
$21,995.00
Applicable ratex3.6%x6.6%
Tax payable$756.00$1,451.67
Reduction on the first $30,000 of taxable supplies for GST purposes ($21,000 x 1%)$210.00
Reduction on the first $31,421 of taxable supplies for QST purposes ($21,995 x 1%)
$219.95
Tax amounts to be remitted in respect of the supplies$546.00$1,231.72

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