Purchases of New or Used Road Vehicles
Persons who purchase a new or used road vehicle other than a motor vehicle from a dealer must pay the GST and the QST to the dealer.
Likewise, persons who purchase a new or used motor vehicle from a dealer must pay the GST to the dealer.
The GST does not apply to the sale of used vehicles between individuals.
Moreover, persons who purchase a new or used motor vehicle at retail are required to pay the QST to the Société de l'assurance automobile du Québec (SAAQ) when the vehicle is registered. If the motor vehicle is not registered by the purchaser within 15 days following the delivery date, the QST will be considered payable by the purchaser at the time the vehicle is actually delivered. The purchaser must then pay the QST to Revenu Québec.
A dealer registered for the GST and QST sells a used motor vehicle for $13,000 to an individual; no vehicle is accepted as a trade-in. The average wholesale price of the vehicle is $12,000 from which $500 is subtracted, giving an estimated value of $11,500.
|Agreed sale price||$13,000.00|
|GST ($13,000 x 5%)||+||$650.00|
|QST ($13,650 x 9.5%)||+||$1,296.75|
The QST is calculated on the greater of the following amounts:
- the agreed sale price
- the estimated value of the vehicle
In this example, the agreed sale price ($13,000) is greater.
For motor vehicles, the QST is calculated by the dealer and must be paid to the SAAQ by the purchaser when the vehicle is registered.
An individual sells a used vehicle to another individual for $10,000. The average wholesale price of the vehicle is $13,000 from which $500 is subtracted, giving an estimated value of $12,500. Neither individual is engaged in commercial activities.
|Agreed sale price||$10,000.00|
|QST payable ($12,500 x 9.75%)||$1,246.88|
The GST does not apply in this case because the sale involves two individuals. The QST applies, however, and must be calculated by the SAAQ on the estimated value since it is greater than the agreed sale price. The vendor, a non-registrant, is not required to calculate the amount of QST payable by the purchaser.
When a used road vehicle is transferred between related individuals for a price that is lower than the valeur estimative (transaction with or without consideration), the QST is calculated on the agreed sale price.
In this case, the Declaration of a Transaction Between Related Individuals with Regard to a Road Vehicle Registered in Québec (form VD-80.1-V) must be completed and remitted to the SAAQ when the vehicle is registered. The form must be accompanied by documents proving the relationship between the individuals.
If a used road vehicle is purchased from a dealer for less than its estimated value because it is damaged or has been subjected to unusual wear, the QST may be calculated on the lower price as long as the purchaser, at the time of the transaction, provides the dealer with an evaluation report prepared by an appraiser who holds a certificate of professional qualification as an automobile damage appraiser issued by the Groupement des assureurs automobiles. The report must have been prepared by the appraiser in the normal exercise of his or her profession at a certified appraisal centre or at an establishment certified by the Groupement des assureurs automobiles.
The dealer must keep the report in case there is an audit at a later date. A copy of the evaluation report must also be submitted to the SAAQ when the vehicle is registered.
If the purchaser pays QST on the estimated value of the vehicle, he or she may claim a rebate of the QST overpaid by submitting a rebate application and the evaluation report (dated within 10 working days after the date of the transaction) to Revenu Québec within the prescribed deadline. The purchaser must make the claim using form VD-60.R-V, Application for a QST Rebate for a Road Vehicle.