Simplified Method for Calculating GST and QST Rebates

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Regardless of the accounting methods you use to calculate the net tax payable, you can use the simplified method to calculate the GST and QST rebates a public service body (PSB) can claim. The simplified method makes it easier to calculate the rebates, since you do not have to keep track of the GST and QST on each invoice. You must, however, separate the purchases on which the PSB paid GST and QST from those on which it did not.

To use the simplified method, the PSB must meet the following conditions:

  • The total of its taxable supplies for the previous fiscal year or the previous quarters of the current fiscal year does not exceed $1 million.
  • The total of its taxable (other than zero-rated) purchases and expenses for the previous fiscal year did not exceed $4 million, and it is reasonable to expect that the total for the current fiscal year will not exceed that amount either.

You do not have to complete any forms to notify us that you are using this method.

Step 1 – Calculate total eligible purchases and expenses

Add up the eligible purchases and expenses on which the PSB paid GST and QST. Include:

  • the purchase price
  • the GST and QST
  • import duties
  • non-refundable provincial sales taxes
  • reasonable tips
  • interest and penalties paid to suppliers for late payments

Do not include:

  • purchases and expenses for which the PSB can claim an input tax credit (ITC) or an input tax refund (ITR)
  • purchases and expenses on which the PSB did not pay the GST or QST
  • purchases and expenses outside Québec that are not subject to the QST
  • purchases and expenses outside Canada that are not subject to the GST
  • the portion of meal and entertainment expenses that does not give entitlement to an ITC or an ITR
  • refundable provincial sales taxes
  • the cost of purchasing or renting immovables (real property)
Step 2 – Calculate the taxes paid on eligible purchases and expenses

To calculate the GST paid on eligible purchases and expenses, multiply the result in step 1 by 5/105.

To calculate the QST paid on eligible purchases and expenses, multiply the result in step 1 by 9.975/109.975.

Step 3 – Add the taxes paid on immovables

To the GST calculated in step 2, add the GST paid on purchases of immovables for which the PSB cannot claim ITCs.

To the QST calculated in step 2, add the QST paid on purchases of immovables for which the PSB cannot claim ITCs.

Step 4 – Calculate the GST and QST rebates

Multiply the GST and QST calculated in step 3 by the applicable rebate rate.

Note

If the PSB paid the HST on purchases, follow the same steps to calculate the HST rebate.

For more information, see the Guide to the GST/HST and QST Public Service Bodies' Rebate Application (FP-2066.G-V).

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