Question and Answers about the CRA's administration of the QST and the GST/HST for SLFIs that have a permanent establishment in Quebec and listed financial institutions that would be SLFIs if Quebec were a participating province

Since January 1, 2013, the Canada Revenue Agency (CRA) has been administering the goods and services tax/harmonized sales tax (GST/HST) and the amended Quebec sales tax (QST) for all selected listed financial institutions (SLFIs) as well as all listed financial institutions that would be SLFIs if Quebec were a participating province (QST SLFIs).

A participating province is a province where an HST has been implemented to replace the provincial sales tax, for example New Brunswick and Ontario.

In general terms, an SLFI for GST/HST purposes is a listed financial institution - such as a bank, an investment dealer, an insurance company, a credit union, a tax discounter, a mutual fund trust or corporation, a trust governed by a registered pension plan, or a person whose principal business is lending money-that has a permanent establishment (in this context, generally established based on the location of its clients, operations, unit holders and/or plan members) in a participating province and a permanent establishment in at least one other province, for example Ontario and Quebec.

It is proposed that an SLFI for QST purposes, in general terms, would be a listed financial institution that has a permanent establishment in Quebec and a permanent establishment in another province.

There are effectively three categories of SLFIs as described below:

HST SLFI
An SLFI for GST/HST purposes only, in general terms is a listed financial institution that has a permanent establishment in a participating province and another province, but does not have a permanent establishment in Quebec (for example, Ontario and Saskatchewan).

QST/HST SLFI
An SLFI for both GST/HST purposes and for QST purposes, in general terms is a listed financial institution that has a permanent establishment in a participating province and in Quebec (for example, Ontario and Quebec).

QST SLFI
An SLFI for QST purposes only, in general terms is a listed financial institution that has a permanent establishment in Quebec and a permanent establishment in another non-participating province, but does not have a permanent establishment in a participating province (for example, Quebec and Manitoba).

1. What changed on January 1, 2013 for QST SLFIs and SLFIs that do business in Quebec?
2. Where should SLFIs and QST SLFIs send their GST/HST return and QST return beginning January 1, 2013?
3. How to correctly remit amounts owing over $50,000?
4. How to correctly remit amounts owing over $25 million?
5. Are there any changes to my reporting periods?
6. What about my QST registration with Quebec?
7. Which identification number will I use when I deal with the CRA for purposes of the QST and GST/HST?
8. Are there any other changes of which I should be aware?
9. Can an SLFI offset GST/HST and QST amounts?
10. Where can I get more information?

1. What changed on January 1, 2013 for QST SLFIs and SLFIs that do business in Quebec?

As a result of a Comprehensive Integrated Tax Coordination Agreement (CITCA) signed by the governments of Canada and Quebec in March 2012, the rules that apply for QST are changing to be consistent with the GST/HST rules under federal legislation, with certain exceptions described in the CITCA. The QST remains a provincial tax separate from the GST/HST, and Quebec will not be a participating province for GST/HST purposes.

Since January 1, 2013, the CRA has been administering both the GST/HST and the QST for all SLFIs and QST SLFIs.

If you are an SLFI or a QST SLFI and you are required to report amounts of GST/HST and QST collected, you must send your remittances to the CRA for reporting periods ending on or after January 1, 2013. New forms, such as RC7200, which is the equivalent of the GST34-2 return, will be used for this purpose.

You must provide separate figures for the amounts of GST/HST and QST that you are remitting. Please note you will not be able to either file or make your payments using Electronic Data Interchange (EDI).

2. Where should SLFIs and QST SLFIs send their GST/HST return and QST return beginning January 1, 2013?

SLFIs and QST SLFIs that have reporting requirements for GST/HST and QST purposes must send a combined GST/HST and QST return to the CRA in paper format only. The following new forms will be used for this purpose depending on the particular situation:

• Form RC7200, Goods and Services Tax/Harmonized Sales Tax (GST/HST) and Quebec Sales Tax (QST) Return for Selected Listed Financial Institutions;
• Form RC7262, Goods and Services Tax/Harmonized Sales Tax (GST/HST) and Quebec Sales Tax (QST) Return for Selected Listed Financial Institutions (non-personalized); or
• Form RC7294, Goods and Services Tax/Harmonized Sales Tax (GST/HST) and Quebec Sales Tax (QST) Final Return for Selected Listed Financial Institutions.

To file the RC7200, RC7262, or RC7294 return, you must mail it to:

Canada Revenue Agency
Summerside Tax Centre
275 Pope Road
Summerside PE C1N 6A2

SLFIs and QST SLFIs still have access to the CRA's electronic My Business Account service and can still do things such as viewing the returns that have to be filed, checking bank information, and making enquiries.

3. How to correctly remit amounts owing over $50,000?

Payments must be made at a financial institution. Ensure you write on the return or the voucher what amount is for GST/HST and what amount is for QST. Payments must be accompanied by the return or an original remittance voucher (to receive vouchers please contact 1-800-959-5525). The vouchers will be personalized and mailed to the address on file. The voucher currently available is:

• RC158 Remittance Voucher - Payment on Filing

The following vouchers will be available for QST payments as of October 2013 and can be requested in the same manner as above.

• RC159 Remittance Voucher - Amount Owing
• RC160 Remittance Voucher - Interim Payments

Please present the return at the financial institution in the event you have both the return and the voucher. The financial institution can only accept one paper instrument with a payment.

4. How to correctly remit amounts owing over $25 million?

Payments over $25 million must be made at the financial institution. Ensure you write on the return or the voucher what amount is for GST/HST and what amount is for QST. The Canadian Payments Association (CPA) provides guidelines on how payments are accepted. The financial institutions will not accept cheques for more than $25 million. Please contact your financial institution for more details. The financial institution will make the arrangements for the transfer of funds electronically to the CRA.

5. Are there any changes to my reporting periods?

Since January 1, 2013, the QST reporting period must correspond with the GST/HST reporting period. For SLFIs and QST SLFIs that are registered for the QST, reporting periods that begin on January 1, 2013 will end on the same date as the SLFI's GST/HST reporting period.

If an SLFI or a QST SLFI has a QST reporting period that includes January 1, 2013, that reporting period will end on December 31, 2012. The new reporting period will begin on January 1, 2013, and end on the same date as its GST/HST reporting period.

6. What about my QST registration with Quebec?

For SLFIs that are administered by the CRA since January 1, 2013, Revenu Québec will automatically close their QST account effective December 31, 2012. However, these SLFIs will continue to have access to their account history through Revenu Québec.

7. Which identification number will I use when I deal with the CRA for purposes of the QST and GST/HST?

Since January 1, 2013, the CRA has been administering the QST, on behalf of Revenu Québec, and the GST/HST for SLFIs as well as QST SLFIs, using the GST/HST business number.

You can contact the CRA at 1-800-959-5525 if:

• you are located outside Quebec, are already registered for the GST/HST, and have to register for the QST because you do business in Quebec; or
• you do business in Quebec and want to register for both the GST/HST and the QST.

As of January 1, 2013, if you are not registered for the GST/HST, you must ask Revenu Québec to cancel your QST registration.

8. Are there any other changes of which I should be aware?

With the implementation of the changes to the QST system, supplies of financial services that were zero-rated under Quebec tax law prior to January 1, 2013, are, as a general rule, exempt since January 1, 2013, as is the case under federal tax law.

The QST paid on goods and services that suppliers acquire for the sole purpose of making exempt supplies of financial services will not be eligible for an input tax refund (ITR). Transitional rules are being introduced to facilitate this change. Information Bulletin 2012, issued by Quebec's Ministère des Finances on May 31, 2012, discusses these rules and provides other important information, such as the following:

• Change in use rules for capital property are described and have been adapted to avoid costs related to changes in use on December 31, 2012.
• The QST rebate rate for registered pension plan entities will be the same as the GST/HST rate.
• To calculate their eligible input tax refunds for any reporting period beginning after December 31, 2012, financial institutions must use the same allocation methods that they use to calculate their eligible input tax credits.
• For fiscal years beginning after December 31, 2012, registered financial institutions must file an annual information return for QST purposes, if they have to file the annual information return for GST/HST purposes (Form GST111). This return must be filed within six months of the end of their fiscal year.

9. Can an SLFI offset GST/HST and QST amounts?

Generally, a person that is an SLFI or a QST SLFI that is filing a GST/HST and QST return can use a GST/HST or QST amount owed to them in a reporting period to reduce a QST or GST/HST amount that they owe in the same reporting period. An example of a GST/HST and QST return is Form RC7294, Goods and Services Tax/Harmonized Sales Tax (GST/HST) and Quebec Sales Tax (QST) Final Return for Selected Listed Financial Institutions.

However, investment plans that are SLFIs or QST SLFIs cannot offset GST/HST and QST amounts when they file their GST/HST and QST returns on a consolidated basis. To file on a consolidated basis, SLFI or QST SLFI investment plans have to make an election.

Specifically, a GST/HST amount owing for a reporting period cannot be reduced by a QST refund on a return that is filed on a consolidated basis. Similarly, a QST amount owing cannot be reduced by a GST/HST refund on a return that is filed on a consolidated basis.

For more information on consolidated filing, see GST/HST NOTICE288, Consolidated Filing for Investment Plans that are Selected Listed Financial Institutions.

10. Where can I get more information?

For information about the GST/HST, visit the CRA Web site at www.cra.gc.ca/gsthst or contact the CRA as follows:

• For GST/HST account-related enquiries or to register for a CRA business number, call 1-800-959-5525.
• For technical GST/HST enquiries, call 1-800-959-8287.

For information about the Quebec sales tax, contact Revenu Quebec client services at 1-800-567-4692 or visit the Revenu Quebec website.

For answers to questions about the administration of the QST as it applies to SLFIs and QST SLFIs:

• For account-related enquiries or to register for a CRA business number, call 1-800-959-5525.
• For technical GST/HST and QST enquiries about SLFIs and QST SLFIs, call 1-855-666-5166.

Visit the CRA and Revenu Québec websites regularly for updates.

Date modified:

2015-03-30