Purchase of a Road Vehicle for Resale

Calculating the GST

If you purchase a road vehicle for resale, you must pay 5% GST on the agreed sale price if the vendor is a registrant. If the vendor is not a registrant, the GST is not payable.

If you are a registrant, you can claim an input tax credit (ITC) for the GST paid on the purchase of the vehicle.

Calculating the QST

Road vehicle other than a motor vehicle

If you purchase a road vehicle other than a motor vehicle for resale, you must pay QST, regardless of whether the vendor is a registrant. In the case of a used vehicle, the QST is calculated on the vehicle's estimated value if it is greater than the agreed sale price.

If you are a registrant, you can claim an input tax refund (ITR) for the QST paid on the purchase of the vehicle.

Motor vehicle

The sale of a motor vehicle to a person who acquires it solely for resale, or for lease for a period of at least one year, is considered to be a zero-rated supply under the QST system if the person is a registrant.

Neither the SAAQ nor Revenu Québec will refund (as an ITR or in another manner) the QST paid on the zero-rated supply of a motor vehicle.

If the purchaser is not a dealer and does not want to pay the QST when registering the vehicle, the purchaser must complete the Certificate of Determination Respecting the QST: Registration of a Road Vehicle (form VDE-23-V). To obtain this certificate, the purchaser must also complete the Application for a Certificate of Determination Respecting the QST: Registration of a Road Vehicle (VD-55.1-V) and provide documents justifying the requested exemption.

For more information, see Reduction of or Exemption from the QST.

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