If your business is a large business for QST purposes, remember that you can claim 50% of the QST paid since January 1, 2019 on expenses subject to input tax refund (“ITR”) restrictions.

ITR restrictions are gradually eliminated by 25% per year starting in 2018. As a result, a large business can claim a portion of the QST paid on the restricted expenses as follows:

• 2018 : 25 %;
• 2019 : 50 %;
• 2020 : 75 %;
• 2021 and subsequent years: 100%.

In summary, expenses subject to ITR restrictions include:

• Road vehicles weighing less than 3,000 kg that must be registered under the Highway Safety Code to operate on public roads (“restricted vehicles”);
• Gasoline used to power the engines of restricted vehicles except for diesel;
• Improvements made to restricted vehicles within 12 months of their acquisition or importation into Quebec;
• Electricity, gas, fuel and steam used other than in the production of movable goods for sale;
• Telecommunication services, except for “1 800” line services and Internet services;
• Food, beverages and entertainment whose deductibility is limited under the Taxation Act.

If you would like more details on the phase-out of the ITR restrictions, you can consult the bulletin TVQ 206.1-10 Particulars regarding the phasing out of the ITR restrictions applicable to large businesses that is to begin on January 1, 2018, published by Revenu Québec.