February 22th, 2024
Corporate CPAs
Employers who are GST/HST/QST registrants must pay/remit GST/HST/QST on certain taxable benefits provided to their employees (notably on taxable ― other than zero-rated ― goods and services made available to employees). The total or partial value (including GST/HST/QST, where applicable) of these benefits must be included in the calculation of employees’ taxable income. In addition, GST/HST/QST must be included in the employer’s net tax calculation.
In Quebec, the GST and QST amounts that the employer must remit to tax authorities in respect of the taxable benefits unrelated to operating expenses of an automobile correspond to 4/104 (for GST) and 9.975/109.975 (for QST) of the value of the total declared taxable benefits (GST and QST included) minus the amounts reimbursed by the employee for expenses relating to the right to use and operate an automobile. If the taxable benefits are related to the operation of an automobile, the GST and QST amounts that the employer must remit are the prescribed percentage applicable to the total value, i.e. 3% for GST and 6% for QST.
In some cases, assets purchased or leased to provide taxable benefits to employees are subject to restrictions on input tax credits (ITCs) and input tax refunds (ITRs). For example, no ITCs or ITRs may be claimed by an employer in respect of goods or services acquired exclusively (90% or more) for the personal consumption or use of an employee.
Taxes do not have to be paid/remitted if the employer cannot claim ITCs or ITRs for such goods or services.
Some vehicles are not considered an “automobile” (see the section concerning motor vehicles in Revenu Québec’s guide IN-253 on taxable benefits). In this case, there is no taxable benefit to include in the employee’s income for these vehicles, nor is there any GST/QST to be paid or remitted.
Did you know that there is an option not to charge GST/QST on a taxable benefit related to the personal use of a vehicle? See Consultaxe’s blog at the link below for more details:
https://consultaxe.com/en/did-you-know-that-there-is-an-option-not-to-charge-gst-qst-on-a-taxable-benefit-related-to-the-personal-use-of-a-vehicle/
For more details, please refer to Revenu Québec’s guide IN-253 on taxable benefits, especially for detailed calculations of taxable benefits unrelated to operating expenses and those related to operating expenses.
