On the afternoon of March 27th, Québec's Minister of Finance, Carlos Leitão, tabled the 2018-2019 budget in front of the Québec National Assembly. A key announcement with respect to Québec Sales Tax (QST) is requiring businesses located outside Québec to register and collect the QST for certain supplies to consumers.
The Ministry of Finance has published clarifying guidance on this budget pronouncement. Specifically, effective January 1, 2019, foreign companies that sell more than $30,000 in taxable supplies per year of incorporeal property or services to Québec consumers will be required to register for and collect the QST. Effective September 1, 2019, Canadian companies without a physical or significant presence in Québec that sell more than $30,000 in taxable supplies per year to Québec consumers will also be required to register for and collect the QST. A special registration system in conformity with OECD recommendations will be set up to enable and facilitate compliance of the affected suppliers.
The same obligation also applies to digital platforms through which supplies of incorporeal property or services are made to specified Québec consumers, if these digital platforms control the key elements of transactions, such as billing, transaction terms and conditions, and delivery term. Digital platforms refer to digital property and services distribution platforms.
The above clarifying guidance, contained in THE QUÉBEC ECONOMIC PLAN, can be viewed at: http://www.budget.finances.gouv.qc.ca/budget/2018-2019/en/documents/AdditionalInfo_18-19.pdf.
It is expected that the legislative measures for the above Budget announcements will be passed by the National Assembly rapidly.
For further information on the 2018-2019 Québec budget, please see the main landing page at http://www.budget.finances.gouv.qc.ca/budget/2018-2019/en/index.asp.
About the Author
Katie Smethurst is a Junior Regulatory Counsel at Sovos. Within Sovos’ Regulatory Counsel function, Katie focuses primarily on international and U.S. based indirect tax research and analysis. Katie is a member of the Massachusetts and New Hampshire Bars, earned her B.A. from Roger Williams University and earned her J.D. from Suffolk University Law School.More Content by Kaitlyn Smethurst