New QST rate takes effect January 1, 2013

In March 2011, the governments of Canada and Quebec announced an agreement to harmonize the Quebec sales tax (QST) system with the goods and services tax (GST) system. This means Quebecers will no longer pay the provincial tax on the federal tax.

The Amended QST that takes effect January 1, 2013 will take the new value of 9.975 per cent and apply it to the amount of the goods and services purchased. Previously, the rate of 9.5 per cent was levied on the GST-included value, which was equivalent to the new rate of 9.975 per cent.

The Amended QST mirrors the GST/HST legislation with respect to the treatment of financial services and financial institutions. This will result in generally treating the supply of financial services as exempt instead of zero-rated. This change will not affect Concordia University activities.

Where the consideration is paid or becomes payable on or after January 1, 2013, the new rate must be used.

QST exemption ends April 1, 2013
Effective April 1, 2013, government institutions currently exempt from payment of the GST/HST and the QST will have to pay these taxes on their acquisitions of taxable properties and services.

Accordingly, Concordia University will be required to charge QST and GST/HST to all federal and provincial departments and its mandatories on acquisitions of taxable properties and services.

For information on how to apply the new rate, read the full announcement on the Financial Services web pages (see link below).

For help in updating your various systems, or for any additional questions, contact Geneviève Desrosiers at 514-848-2424 ext. 4720.

Related links:
•    Read the full announcement from Financial Services 
•    Revenu Quebec website
•    Information bulletin from Finances Quebec