Large businesses








The following goods and services do not give entitlement to input tax refunds (ITRs) if they are acquired by a large business:

  • road vehicles under 3,000 kilograms that must be registered under the Highway Safety Code to be driven on public roads;
  • goods and services relating to such vehicles, where the goods or services are acquired in Québec or brought into Québec within 12 months following the date on which the vehicle was acquired in, or brought into, Québec;
  • fuel, other than fuel oil, used to supply the engine of such vehicles;
  • electricity, gas, steam or combustibles, except when used to produce personal property intended for sale;
  • telephone services and other telecommunications services, except Internet access services and “1 800,” “1 888” and similar numbers; and
  • food, beverages and entertainment that are only 50% deductible under the Taxation Act.

Phasing out of ITR restrictions

The ITR restrictions for large businesses are being phased out effective January 1, 2018. As a result, large businesses can claim ITRs for goods and services to which the restrictions apply at a rate of:

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

As of January 1 of each of these years, the QST paid or payable on acquisitions of goods and services to which the restrictions apply may be included in the calculation of a large business' ITRs at the applicable rate for the year in question.

Large business status

As a registrant, you must determine whether you are a small or medium-sized business (SMB) or a large business for each fiscal year.

You are generally considered to be a large business for a given fiscal year if your and your associates' taxable supplies made in Canada exceeded $10 million during the last fiscal year that ended before the given fiscal year. If the last fiscal year is shorter than 365 days, the value of the taxable supplies for that year must be adjusted on the basis of a one-year period.

Your taxable supplies made in Canada must include the following:

  • the value of all exports;
  • supplies deemed to have been made outside Canada;
  • supplies deemed to have been made for nil consideration.

Supplies can be made for nil consideration pursuant to a joint election made by corporations that are specified members of a group of closely related corporations.

The amount of your taxable supplies made in Canada must not include:

  • GST;
  • amounts from the sale of real property that is capital property;
  • amounts from the sale of the goodwill of a business where no QST is payable on the sale.

It is important to note that the following businesses and related persons are considered large businesses, regardless of the value of their taxable supplies:

  • banks
  • trust companies
  • credit unions
  • insurers
  • investment plans

New registrants

In general, new registrants do not have to determine whether the taxable supplies made during the last fiscal year exceeded $10 million unless the following conditions are met:

  • The business is a corporation resulting from an amalgamation. In such a case, the value of the taxable supplies made by each predecessor corporation must be taken into account.
  • The business is carried on by a person that does not reside in Québec. In this case, the value of the taxable supplies that the person makes elsewhere in Canada must be taken into account.

Where a large business acquires control of an SMB during the SMB's fiscal year, the SMB (and any related corporations) retains its status as an SMB until the end of its current fiscal year, but it (and any related corporations) is considered a large business as of the beginning of the following fiscal year.

A member of a partnership (other than an individual) is deemed to be an SMB or a large business based on whether the partnership itself is an SMB or a large business.


For more information, do not hesitate to contact your trusted LCA accountant.