At the end of March 2024, Revenu Québec replaced bulletin QST 423-1/R2 with a new version. The bulletin’s content has been updated and some editorial changes were made.
Before discussing the changes in more detail, a quick reminder of the QST rules applicable to taxable supplies of real property by way of sale to a registrant.
In accordance with section 422 of the QSTTA, the person making a taxable supply must collect the QST payable by the recipient and include it in his or her net tax calculation.
However, under paragraph 2, section 423 of the QSTTA, where a supplier other than a prescribed supplier makes a taxable supply of real property by way of sale to a recipient other than an individual, and that recipient is registered under section I, Chapter VIII, Title I of the QSTTA, the supplier is not required to collect the tax payable by the recipient under article 16 of the QSTTA in respect of the supply.
After reading the new version of bulletin 423-1/R3, we would like to draw your attention to the changes to paragraphs 13 and 14 made by Revenu Québec. In the previous version of the bulletin, Revenu Québec stated in paragraph 13 that the vendor of an immovable was not required to collect QST if the purchaser was not registered, but was required to be. However, Revenu Québec still advised the seller to obtain proof of registration prior to the transaction.
In the new version of the bulletin (QST 423-1/R3), Revenu Québec has simply removed the former paragraph 13. Our conclusion is that Revenu Québec’s new position is that the purchaser must be registered at the time of the transaction for the supplier to rely on paragraph 2, section 423 of the QSTTA to justify non-collection of the QST payable by the purchaser.
If you have any questions about the changes to Revenu Québec’s position, or if you have any concerns about the impact these changes may have on your practice, please be sure contact us.
