On November 21, 2024 finance Minister Chrystia Freeland announced a GST/HST holiday on a series of goods including meals for a two-month period starting on December 14, 2024. As of this day, There is no indication that the Quebec Government, as it often does, will harmonize the QST regime with this announcement. Also the provinces with a harmonized tax have not confirmed this change, and they should since they will be the ones paying for the PVAT (provincial value added tax) portion i.e 8% or 10%. Finally assuming it will be adopted by parliament, has several implications on meals that are incurred by organizations in the course of their activities, such as the one contained on expense reports and on corporate credit card statements:
• There would be presumably no GST/HST on meals across the country
• In Québec, solely the QST would be applicable at a rate of 9.975%
As for Advataxes whenever employees select the “meal” category and the date of the receipt from December 14th, 2024 to February 15th, 2025 then the tax paid will be as follows:
• No GST/HST
• In Québec, the QST at 9.975%
• If some harmonized provinces do not harmonize wuth this measure, then we would use the PVAT (i.e. 8% or 10%)
Of course, employees should validate the tax amount on the meal receipt and the one in Advataxes and rectify as the case may be. With Advataxes, there is no configuration involved by accountants, we take care of automating this tax rule change for all of our clients.
Furthermore, for those clients where it is applicable, the QST input tax refund will be calculated at a rate of 50% of the tax paid. Lastly, any tip amount will, as usual, be excluded from the tax calculation.
Factors method
As for the factors method (see our page “Exact Method VS Factors Method“), one of the conditions to use it is that an expense report should be taxable at 90% or more. Considering that meal expenses are generally big-ticket items in an expense report, one would ponder whether input tax credits or GST/HST rebate can actually be claimed when using the factors method for expense reports covered by the GST/HST holiday. Advataxes is solely set for the exact method.
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