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Old 10-27-2011, 09:43 PM   #1
acadian_dad
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Question Taxes on QC dealer purchase

Searched a little but can't find a definitive answer on this.

Ontario resident - looking at a Quebec dealership car and looking to do a trade in ...

So, in Ontario, at a dealer I would pay the GST+RST on the net of the purchase price less trade-in value.

I believe for a Quebec resident, in Quebec, same thing would happen.

I've read about various scenarios about taxes payable at MTO when registering a Quebec car - for private sales its pretty clear you owe GST+RST on the purchase price. For dealer purchases it seems more muddy - seen some indication that dealer will collect GST but not QST and PST will be payable in Ontario. In other cases I've seen full amount of GST+RST is payable in Ontario and you apply to get the tax paid in Quebec back.

But its not at all clear to me (maybe I'm just thick) what amount I have to pay on a dealer purchase including a trade ...

Has anyone done this since the HST implementation when the car tax rules changed ?
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Old 10-27-2011, 10:12 PM   #2
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I can't answer your question, but if you need an Ontario partner, I can help out. I can buy the car from the QC dealer, sell it to you less trade, so long as he agrees to buy the trade from me. It's just a flow-through, but then there's no issue with the taxes, because you'd be buying from an Ontario dealer, and I'd be doing a wholesale transaction with the QC dealer (no tax implications for me). Perfectly legal and legit, just a bit more paperwork.
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Old 10-27-2011, 10:24 PM   #3
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Sounds complicated indeed. For info, you could call:

ServiceOntario's Driver and Vehicle Contact Centre:
Toronto area: 416-235-2999
Toll free: 1-800-387-3445 (Canada wide)

I called them last week to ask about the trailer I brought back from Quebec, and they were generally helpful and correct... except that they told me that I would need a receipt to do the transfer, but I did not.

Also, although I was expecting to pay the 13% HST, they only charged me 8% tax???
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Old 10-27-2011, 10:33 PM   #4
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Will give them a call tomorrow - thanks
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Old 10-27-2011, 10:47 PM   #5
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Quote:
Originally Posted by Christien View Post
I can't answer your question, but if you need an Ontario partner, I can help out. I can buy the car from the QC dealer, sell it to you less trade, so long as he agrees to buy the trade from me. It's just a flow-through, but then there's no issue with the taxes, because you'd be buying from an Ontario dealer, and I'd be doing a wholesale transaction with the QC dealer (no tax implications for me). Perfectly legal and legit, just a bit more paperwork.
Thanks for the offer - was thinking I might have to do something like that - will see if I can do everything "normally" first though ...
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Old 10-28-2011, 06:06 PM   #6
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In the interests of providing information to anyone considering similar transaction in the future ... here is what I have found ...

This all assumes that the car is purchased from a registered dealer by someone who is not required to calculate GST/HST (eg. an individual, not a business).

In Quebec, the selling dealer collects GST (5%) on the net purchase price less trade-in allowance. And calculates the QST (8.5%) due to the SAAQ - but should not collect it. The dealer could potentially acts as an intermediary to register the vehicle for you (in which case you give them the QST) but there is no requirement for this.

Note that if the vehicle gets registered in Quebec even for temp plates, the QST will be payable (at an SAAQ office) but an application for rebate can be submitted to get the QST back (I believe this takes a few months).

Note however, if the vehicle is shipped directly by the seller out of Quebec or consigned to a common carrier for shipment out of Quebec, no QST is payable. The interpretation bulletins are silent on the following, but presumably if I personally carry the car out of Quebec on a trailer, then since no Quebec plates are required, no QST would be payable as well. (I need to check how dealer "cancels" the registration in Quebec if necessary)

So, at this point GST has been paid and QST has been calculated and potentially paid (with a refund coming if paid). And the GST / QST are based on the net purchase price less trade-in allowance.

reference here

Now, when you go to register the car in Ontario, you need to pay the "Provincial Portion of the HST" at time of registration. Note that Service Ontario only collects this on behalf of CRA - the rules are CRA rules. The worry I had was because the MTO / Service Ontario websites do not state whether the gross purchase price or net purchase price less trade-in allowance is used.

However, CRA guide RC4100 - available here - states on page 5

"Do the provinces and the CRA
calculate tax on the same value?
The participating provinces use the same value to calculate
the provincial part of the HST as the CRA uses to calculate
the GST."

So that means that Service Ontario should use the same net purchase price less trade-in allowance to calculate the provincial part of the HST.

So, in theory at least, at the end of the day, you end up paying the same tax as if the purchase transaction happened in Ontario. Next step will be to see if this works in practice ...
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Old 10-28-2011, 06:12 PM   #7
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Quote:
Originally Posted by acadian_dad View Post
(I need to check how dealer "cancels" the registration in Quebec if necessary)
I'm fairly certain that registering the vehicle in Ontario will effectively cancel the QC registration.

Glad you got it all straightened out! If you can, why not register Ontario plates to the car so you can drive it home?
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Old 10-28-2011, 07:23 PM   #8
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So, when I paid "only" 8% tax on the trailer I brought in from Quebec last week, that would have been the "Provincial Portion of the HST" mentioned above???

So, I guess that no one charged me the GST portion. Should I have had to pay the GST portion as well at some point? Christien, what taxes now apply to a used vehicle purchase? HST or just PST as before?

In line with what was said above, before leaving Quebec with the trailer, we did go to the license bureau. They told me that they could give me a "Transit" (a temp "plate"), but that they would have to charge me the QST.
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Old 10-28-2011, 09:47 PM   #9
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Quote:
Originally Posted by Christien View Post
I'm fairly certain that registering the vehicle in Ontario will effectively cancel the QC registration.

Glad you got it all straightened out! If you can, why not register Ontario plates to the car so you can drive it home?
Thinking along those lines ... or maybe my current ONT plates on the new vehicle for the drive back (a-la Thane and his recent adventure to Florida) ... but the new trailer needs some love too ...

Quote:
Originally Posted by FFaust View Post
So, when I paid "only" 8% tax on the trailer I brought in from Quebec last week, that would have been the "Provincial Portion of the HST" mentioned above???

So, I guess that no one charged me the GST portion. Should I have had to pay the GST portion as well at some point? Christien, what taxes now apply to a used vehicle purchase? HST or just PST as before?

In line with what was said above, before leaving Quebec with the trailer, we did go to the license bureau. They told me that they could give me a "Transit" (a temp "plate"), but that they would have to charge me the QST.
Yup 8% is the Prov part of HST. All car purchases in Ont are now subject to HST (new or used). It just more complicated on these out of province transactions. If you bought from a private individual then you should have paid HST to register the vehicle. If you bought from a registered person (eg. a business or dealer) - they should have collected GST from you and then you would only pay the prov part of HST when registering it here.

So did you get the temp tag ? If not, how did you bring it from QC ?

So looks like you got a REALLY good deal on the trailer ...
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Old 10-28-2011, 10:05 PM   #10
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Quote:
Originally Posted by FFaust View Post
So, when I paid "only" 8% tax on the trailer I brought in from Quebec last week, that would have been the "Provincial Portion of the HST" mentioned above???

So, I guess that no one charged me the GST portion. Should I have had to pay the GST portion as well at some point? Christien, what taxes now apply to a used vehicle purchase? HST or just PST as before?

In line with what was said above, before leaving Quebec with the trailer, we did go to the license bureau. They told me that they could give me a "Transit" (a temp "plate"), but that they would have to charge me the QST.
Within Ontario, HST must be charged on all vehicle sales. If it's a dealer sale, the dealer collects and remits HST. If it's a private sale, HST is paid at the time of registration, to the MTO. Coming from out of province, I would assume you'd pay nothing to the dealer or private seller there, then the complete HST when registering here. Though I've never bought an OOP vehicle before that didn't come through a local auction.

I did lease a car to my sister in NS recently. I have to collect and remit HST at their rate (15%), not Ontario's. So that tells me that the PST due is dependent on the province the car is brought into, not where it's bought from.
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Old 10-28-2011, 10:34 PM   #11
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Ok well, somebody must have dropped the ball (in my favour for once), as I did not pay GST to anyone. I bought from a private person. Since I didn't want to pay the Quebec tax, nor did I want the hassle of claiming back later, I drove home with the seller's plate and registration, which he had signed over to me.

I then simply walked in to my local "private" Services Ontario office, and handed the registration over, asking to transfer it to my name. Paid the fee, paid the PST, and that was it.

Yeah, I got a pretty good deal. The seller used it twice behind his motorhome to go to Florida, and I think that he wanted it gone before he went back next month.

He asked, "what will it take to do this tonight?". I told him that I was worried that it might be too big and heavy, but said that if the price was right, I could take a chance, and still be able to sell it if it was indeed too big/heavy. We agreed on a price and shook hands.

The interior is nicer than my garage. Now I need to accessorize

Been looking at 2500HD trucks, just in case. Yeah, it's pretty big...
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Old 10-28-2011, 10:35 PM   #12
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Quote:
Originally Posted by Christien View Post
Within Ontario, HST must be charged on all vehicle sales. If it's a dealer sale, the dealer collects and remits HST. If it's a private sale, HST is paid at the time of registration, to the MTO. Coming from out of province, I would assume you'd pay nothing to the dealer or private seller there, then the complete HST when registering here. Though I've never bought an OOP vehicle before that didn't come through a local auction.

I did lease a car to my sister in NS recently. I have to collect and remit HST at their rate (15%), not Ontario's. So that tells me that the PST due is dependent on the province the car is brought into, not where it's bought from.
That CRA document is pretty useful (I think I provided a link in my long post) - it has a table of what's payable where for all the different province to province scenarios.

Its pretty clear that if you buy from dealer anywhere in Canada for delivery in Canada, the dealer collects and remits GST. Depending on the province, etc. they may collect and remit the whole HST. If you paid GST (eg. in QC) and are registering in a "paritipating province" (eg. Ontario) - then you just pay the "prov part of the HST" at registration in Ontario.
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Old 10-29-2011, 05:53 PM   #13
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Quote:
Originally Posted by FFaust View Post
Ok well, somebody must have dropped the ball (in my favour for once), as I did not pay GST to anyone. I bought from a private person. Since I didn't want to pay the Quebec tax, nor did I want the hassle of claiming back later, I drove home with the seller's plate and registration, which he had signed over to me.

I then simply walked in to my local "private" Services Ontario office, and handed the registration over, asking to transfer it to my name. Paid the fee, paid the PST, and that was it.

Yeah, I got a pretty good deal. The seller used it twice behind his motorhome to go to Florida, and I think that he wanted it gone before he went back next month.

He asked, "what will it take to do this tonight?". I told him that I was worried that it might be too big and heavy, but said that if the price was right, I could take a chance, and still be able to sell it if it was indeed too big/heavy. We agreed on a price and shook hands.

The interior is nicer than my garage. Now I need to accessorize

Been looking at 2500HD trucks, just in case. Yeah, it's pretty big...



looking forward to see that trailer at the track next year,

wow, congrats on the purchase


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Old 10-29-2011, 07:33 PM   #14
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Merci Sébastien
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Old 10-30-2011, 01:48 AM   #15
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very nice trailer
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Old 10-30-2011, 01:48 AM
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