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The Charter of the French language and its regulations govern the consultation of English-language content.

Leases of Road Vehicles

The GST and the QST apply to leases of road vehicles. When a dealer leases such a vehicle to a person, the dealer may sometimes accept the person's used road vehicle as a trade-in. In such cases, the GST and QST are generally calculated on the monthly lease payments, determined on the basis of the amount credited for the trade-in and the residual value of the new vehicle leased, but not on the basis of a loan related to the trade-in vehicle.

The GST and QST must also be collected on any payment made by the lessee at the end of the contract.

Registrant that leases road vehicles

A registrant must collect the GST and QST at the time a road vehicle is leased (short-term or long-term lease). In the case of a long-term lease, the registrant must also collect the taxes if the lessee exercises the purchase option provided for in the leasing contract.


A dealer registered for the GST and QST leases a $20,000 motor vehicle to an individual. The dealer accepts the individual's used vehicle as a trade-in and grants a $5,000 credit for the trade-in. The residual value of the vehicle is $8,000 and the lease period is 48 months.

The monthly payments are calculated as shown below:

Value of the new vehicle $20,000
Credit for the trade-in $5,000
Residual value (purchase option) $8,000
Monthly leasing payment ($7,000/48 months) $145.83
GST: ($145.83 × 5%) + $7.29
QST ($145.83 × 9.975%) + $14.55
Monthly payments ($145.83 + $7.29 + $14.55) $167.67
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