QST: stalking the giants of the Web

TVQ: la traque aux géants du Web

Revenu Québec will have bread on the board in the coming months. One of the giants of the Web, Facebook, Airbnb, GoDaddy, Dropbox, and Vimeo, to name just a few, are not on the list of suppliers outside of Quebec registered for the Québec sales tax (QST).

Wednesday, Revenu Québec has unveiled the 76 players who have complied with the new provincial regulation in force since the 1st January last.

Several companies are missing. According to agency estimates, in the long term, about 130 names should be on this list. Over the next five years, the government believes it will be able to recover approximately $ 155 million due to the collection of the QST (9,975 %).

For Facebook, who is also the patron saint of Instagram, Revenu Québec indicates that the discussions are going well. Note that the company is the only one in the GAFA (Google, Apple, Facebook and Amazon) who has not yet completed the documents.

“We are in communication with officials from Facebook and this is going very well. They have demonstrated their willingness to comply, but they requested additional time and they are not the only ones. It is important to understand that it is a measure which requires changes in technology. Our goal is to accompany companies,” says Stéphane Dion, public relations director at Revenu Québec, recalling that the measure was announced last march. “If we compare that with Australia, it took a lot more time to put in place,” he continued.

Same goes for Airbnb, the executive officer of Revenu Québec ensures that there are always talks between the two groups.

Remember that Airbnb collects from 2017 the lodging tax (3.5 %) overnight across the province. In the course of the last year, the platform on-line booking paid 782 000 $ to the Office of tourism of Québec

“We expected to be confronted by issues of gender,” says Mr. Dion. “We speak of a matter of weeks before they comply. Each company has its special reality. […] To Airbnb, the taxable portion with the QST administration fee”, he adds.

Registered businesses are required to pay their first-due in Quebec from the month of April. Thereafter, the payments will be transferred on a quarterly basis.

Not retroactive

Revenu Québec indicates that it will not measure retroactive for the companies digital is still not listed in the registry. The payments for the QST will start from the date of registration.

Among the companies and the operators of a digital platform located outside of Canada currently enrolled, we find, among others, Netflix, HomeAway, Hotels.com, Linkedin, Spotify and Expedia. The Washington Post is also in the lot.

The new measure is aimed at companies who sell to the Quebec of intangible goods or services to consumers in québec for more than 30 000 $ annually. This government initiative is part of an action plan, which aims to promote healthy competition and ensure a fair tax with local businesses.

“We are very pleased with the first results. It was a huge amount of work to explain this measure to the companies. This is very positive for the future,” said Mr. Dion.

As for Uber, which does not appear on this list, Revenu Québec explained that the organization already receives the sales taxes through the pilot project.

According to the associate professor at the Faculty of administrative sciences of Laval University, Yan Cimon, Quebec can take his time in this folder. However, measures may need to be taken against the recalcitrant so as to be equitable with other companies.

“For the moment, the government has every interest to take his time and use ways less restrictive to obtain the support of the players. Then, it will take measures if there are stubborn”, he says. “We can think of the public campaigns that target industries or more coercive measures,” he continued.

The Ottawa side, it still refuses to impose the tax on the goods and services tax (GST) on the services offered by some giant aliens, like Netflix.

+

TAXED AS TANGIBLE GOODS?

If the minister of Finance Eric Girard shows himself satisfied with the number of foreign companies registered at this moment at Revenu Québec, the Parti québécois (PQ) and Québec solidaire called for it go much further in the taxation of electronic commerce.

“It’s still a good figure for the first week where the act is in force,” said Fanny Beaudry-Campeau, press officer for Mr. Girard.

It is during the budget of march 2018, as the ex-minister of Finance Carlos Leitão announced that the city was imposing the “tax Netflix” for foreign companies that sell intangibles (memberships, advertising, etc) in Quebec.

For the time being, the Coalition avenir Québec (CAQ) is not yet known if she will say more broadly, the e-commerce for tangible goods. “Let’s go one step at a time,” says Ms. Beaudry-Campeau, evasively.

“Emergency action”

The PQ believes that there is an urgency to act and would like Quebec to perceive the QST on goods bought abroad, such as clothing, jewelry, or electronic equipment, so that businesses in quebec are fighting “on equal terms” with foreign companies, said mp Martin Ouellet.

“This is a step in the right direction, but it is necessary to ensure that there is fairness for all enterprises in Quebec”, he adds.

Mr. Ouellet believes that if the CAQ wants to really play the card of “economic nationalism”, it must go forward. The mp believes “that it is able to innovate,” and proposes, for example, as a sticker authenticating that the taxes have been paid, is affixed to the parcels which are in Quebec.

In Québec solidaire, the member of parliament Vincent Marissal believes that “a small step” only just be crossed. He is critical of the current law, which can not really force a foreign company to collect the tax of Quebec. “The voluntary basis, it has its limits, especially in the great capitalism.”

According to Québec solidaire, the best way to tax goods purchased on the Web, it is to go through the credit card. “It is necessary to follow the money trail, as it is done elsewhere, in Australia, for example,” says Mr. Marissal.

The liberal Party of Quebec has not wanted to comment on this folder. Patricia Cloutier

Share