T-0.1 - Act respecting the Québec sales tax

Section 297.7.4.1 Disposition versions

2001-12-20

297.7.4.1. The distributor of a direct seller may deduct the amount determined under subparagraph 4 in determining the net tax for the particular reporting period of the distributor in which the amount is paid, or credited in favour of, an independent sales contractor of the distributor, or for a subsequent reporting period, in a return under Chapter VIII filed by the distributor within four years after the day on which the return under that chapter for the particular reporting period is required to be filed if

(1)  the distributor has made a supply of an exclusive product of the direct seller in circumstances in which an amount was required under paragraph 4 of section 297.7.1 to be added in determining the net tax of the distributor;

(2)  a particular independent sales contractor of the direct seller, other than the distributor, has or would have, but for subparagraph 2 of the first paragraph of section 297.7.2, also made a supply of the exclusive product to a person with whom the particular independent sales contractor was dealing at arm’s length, other than the direct seller, the distributor and another independent sales contractor of the direct seller;

(3)  the distributor has obtained evidence satisfactory to the Minister that the consideration and the tax payable in respect of the supply by the particular independent sales contractor have become in whole or in part a bad debt and that the amount of the bad debt has, at a particular time, been written off in the books of account of the particular independent sales contractor; and

(4)  the distributor pays to, or credits in favour of, the particular independent sales contractor an amount in respect of the exclusive product equal to the amount determined by the formula

A × B / C.

For the purposes of this formula,

(1)  A is the tax payable in respect of the supply made by the particular independent sales contractor;

(2)  B is the total of the consideration and tax in respect of that supply remaining unpaid and written off at a particular time as a bad debt; and

(3)  C is the total of the consideration and tax payable in respect of that supply.

2001, c. 53, s. 321.