Starting January 1, 2018, input tax refund (ITR) restrictions for large corporations will be phased out over a period of three (3) years. As a rule, for QST purposes, a large corporation comprises a corporation whose annual taxable supplies for the previous fiscal year, including those of related businesses, top $10,000,000.
Under the current rules, large QST-registered corporations cannot claim ITRs for certain current expenses, including:
- Road vehicles under 3,000 kg that need to be licensed for use on public roads
- Gasoline used to fuel such a vehicle
- Any improvement made to these road vehicles within 12 months of its acquisition or rental
- Electricity, gas, fuel or steam used for purposes other than the production of movable goods for sale
- Telephone and other communication services other than 1-800 numbers and internet services, and
- Costs related to food, beverages and entertainment limited to a 50% deduction for income tax purposes.
Rate changes effective as of 2018:
|Year||Admissible portion of ITR
on a limited expense
|2021 and subsequent years||100%|
Because of these changes, Revenu Québec has announced a range of transitional rules to be introduced into QST legislation so they align with GST and income tax rules.
For more information, contact us.