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Calculation Methods for Charities

If a charity is a GST/HST registrant because it makes taxable sales, it must use the net tax calculation method for charities to complete its GST/HST and QST returns. For more information, click Calculation Method for Charities.

Election not to use the net tax calculation method for charities

A charity can elect not to use the net tax calculation method for charities if any of the following situations apply:

  • The charity makes sales of zero-rated property or services in the ordinary course of business (for example, exported property or medical devices).
  • The charity sells property or services outside Canada (or outside Québec, for QST purposes) in the ordinary course of business.
  • Substantially all (90% or more) of the charity's sales of property and services are taxable.

To make the election, the charity must file form FP-2488-V, Election or Revocation of an Election Not to Use the Net Tax Calculation for Charities.

Once it has made the election, the charity must calculate its net tax according to the general rules. For more information, click Reporting QST and GST/HST.

Designated charities

A charity can apply for designation so that the services it provides become taxable if they are provided to GST/HST and QST registrants. In this case, the charity must calculate its net tax according to either the general rules or the special quick method of accounting for public service bodies. For more information, click Designated Charities.

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