T-0.1 - Act respecting the Québec sales tax

Section 457.1.4 Disposition versions

2005-06-17

457.1.4. A registrant shall, in determining the net tax for the appropriate reporting period of the registrant, add the amount determined by the formula provided for in section 457.1.5 where

(1)  an amount, other than an amount paid in a remote location, is an expense incurred by the registrant to earn income from a business or property in a taxation year (in this section referred to as the “composite amount”) and

(a)  becomes due from the registrant, or is a payment made by the registrant without having become due in respect of a supply of property or a service made to the registrant, or

(b)  is paid by the registrant as an allowance or reimbursement in respect of which the registrant is deemed under section 211 or 212 to have received a supply of property or a service;

(2)  section 421.1 of the Taxation Act (chapter I‐3) applies, or would apply if the registrant were a taxpayer under that Act, to all of the composite amount or that part of it that is, for the purposes of that Act, an amount paid or payable in respect of the consumption by an individual of food or beverages or in respect of the enjoyment by the individual of entertainment and deems the composite amount or that part of it to be 50% of a particular amount;

(3)  the particular amount exceeds the amount determined under the second paragraph; and

(4)  tax included in the composite amount or deemed under section 211 or 212 to have been paid by the registrant is included in determining an input tax refund in respect of the property or service that is claimed by the registrant in a return for a reporting period in a fiscal year of the registrant.

For the purposes of this section, the determined amount to which subparagraph 3 of the first paragraph refers is equal to the amount determined by the formula

A × 2.

For the purposes of the formula in the second paragraph, A is the amount determined under section 175.6.1 of the Taxation Act that is, or would be if the registrant were a taxpayer under that Act, deductible in computing the registrant’s income from the business or property for the taxation year.

The first paragraph does not apply to charities or public institutions.

2004, c. 21, s. 537; 2005, c. 23, s. 278.

2004-11-03

457.1.4. A registrant shall, in determining the net tax for the appropriate reporting period of the registrant, add the amount determined by the formula provided for in section 457.1.5 where

(1)  an amount, other than an amount paid in a remote location, is an expense incurred by the registrant to earn income from a business or property in a taxation year (in this section referred to as the “composite amount”) and

(a)  becomes due from the registrant, or is a payment made by the registrant without having become due in respect of a supply of property or a service made to the registrant, or

(b)  is paid by the registrant as an allowance or reimbursement in respect of which the registrant is deemed under section 211 or 212 to have received a supply of property or a service;

(2)  section 421.1 of the Taxation Act (chapter I-3) applies, or would apply if the registrant were a taxpayer under that Act, to all of the composite amount or that part of it that is, for the purposes of that Act, an amount paid or payable in respect of the consumption by an individual of food or beverages or in respect of the enjoyment by the individual of entertainment and deems the composite amount or that part of it to be 50 % of a particular amount;

(3)  the particular amount exceeds the amount determined under the second paragraph; and

(4)  tax included in the composite amount or deemed under section 211 or 212 to have been paid by the registrant is included in determining an input tax refund in respect of the property or service that is claimed by the registrant in a return for a reporting period in a fiscal year of the registrant.

For the purposes of this section, the determined amount to which subparagraph 3 of the first paragraph refers is equal

(1)  where the registrant carries on a business of selling, as an intermediary, property included in the inventory of another person, to the amount determined by the formula

1 % × [(A - B) + B/C] × 2; and

(2)  in any other case, to the amount determined by the formula

1 % × A × 2.

For the purposes of these formulas,

(1)  A is or would be, if the registrant were a taxpayer under section 1 of the Taxation Act, the amount, for the taxation year, of the registrant’s gross revenue from the business or property;

(2)  B is or would be, if the registrant were a taxpayer under the Taxation Act, the amount of the commissions or other similar amounts determined by reference to the sales made by the registrant, as an intermediary, of property included in the inventory of another person that are included, for the taxation year, in determining the income from the registrant’s business, for the purposes of that Act; and

(3)  C is or would be, if the registrant were a taxpayer under the Taxation Act, the average percentage used in computing the commissions or other similar amounts determined by reference to the sales made by the registrant, as an intermediary, of property included in the inventory of another person that are included, for the taxation year, in determining the income from the registrant’s business, for the purposes of that Act.

The first paragraph does not apply to charities or public institutions.

2004, c. 21, s. 537.