Freight carriers must take the factors given below into account when dealing with the QST and calculating input tax refunds (ITRs) to which they are entitled.

ITR restrictions

Certain restrictions concerning ITRs apply to large businesses when acquiring property and services. For a complete list, see Large Businesses.

Acquisition of road vehicles weighing 3,000 kilograms or more

Interprovincial and international freight transportation carriers must pay QST when they acquire in Québec a road vehicle weighing 3,000 kilograms or more. Registrants in this case are generally entitled to an ITR.

This rule applies to all interprovincial carriers, regardless of the number of vehicles used for road transport; it also applies to broker drivers hired by an interprovincial motor carrier, regardless of the latter's status. This rule also applies to such vehicles when they are leased by an interprovincial carrier for a period of more than 30 days.

However, under the Interprovincial Sales Tax Arrangement, interprovincial carriers must remit the taxes that are payable to the other provinces in which they provide services. These taxes are prorated based on the number of kilometres travelled in each province.

Carriers must calculate and remit the taxes themselves, or pay them at the time of registration. However, if a vehicle is acquired in a province other than Québec, QST does not need to be paid in proportion to the number of kilometres travelled in Québec.

Acquisition of road vehicles weighing less than 3,000 kilograms

The usual rules apply when a vehicle weighing less than 3,000 kilograms is acquired in Québec by a small or medium-sized business (SMB): the SMB must pay QST, but is generally entitled to an ITR (provided it is a registrant).

When a vehicle weighing less than 3,000 kilograms is acquired in Québec by an interprovincial carrier that is a large business, the carrier must pay QST, in addition to the prescribed taxes in each of the provinces it serves. These taxes are prorated based on the number of kilometres travelled in each province. In respect of the QST, however, the carrier may claim a rebate proportionate to the number of kilometres travelled in the other provinces. Carriers must register their vehicles with the competent authorities in the provinces that are members of the International Registration Plan.

When a vehicle weighing less than 3,000 kilograms is acquired in a province other than Québec, the prescribed provincial taxes are prorated based on the number of kilometres travelled in each province in which the vehicle is used. Large businesses, unlike SMBs, are responsible for calculating and remitting QST with respect to the kilometres travelled in Québec.

When a road vehicle weighing less than 3,000 kilograms is acquired in Québec by an international carrier that is a large business, the carrier must pay QST, but may claim a rebate respecting the QST paid. The rebate is equal to the difference between the amount of QST actually paid and the amount of tax owing, based on the number of kilometres travelled in Québec.