Nicole Longo asked:

I am an individual living in Quebec and I am buying a car for my personal use. It will be exported in the next month to the US. Does this mean that I am eligible for a sales tax refund? If so, does that mean that both the PST and GST is refundable?

David B. Perry answered:

If you are leaving the country on a permanent basis, you should be able to get a refund of both the federal GST and QST paid on the purchase an automobile exported within 60 days. You will have to qualify as a non-resident; the nitty gritty is spelled out in the links below. All the paperwork from the dealer should be kept, as well as some proof that you have become a non-resident. If you are registered as a collector for GST and QST, of course, the rules are different. You should also check to see what will happen in your new home. The rules vary, so check the internet, but generally what you bring in with you is considered "settler's effects" – the necessities of furniture, clothing, appliances, etc - and will not be taxable there. Automobiles may be treated as a special case because it is easy to determine their value, they must be registered by the state and, often, local governments. They represent an easy target for the tax collector.

If you are staying in Canada on a permanent basis, the rules are different. If the car is a gift, to a niece studying in the US, for example, you have no way of recouping the tax. Similarly, if it is for use in conjunction with a summer or winter home in another country, no refund is available. It would be better to arrange through the dealer to have the car exported, perhaps by a broker, so the normal input tax credit for exports can be applied. If you drive the car here, that opportunity is probably lost.

Tax issues are complex, and advance planning can save some grief and money later. Especially if the car is expensive, you might better off to talk first to the dealer and secondly to a customs broker or legal or accounting firm with experience with GST and QST matters.

The specific forms that you will face can be found at: http://www.revenu.gouv.qc.ca/documents/eng/formulaires/vd/vd-60-v(2002-01).pdf and http://www.ccra-adrc.gc.ca/E/pub/gp/rc4033/rc4033-01-e.pdf

About the author

 
Click here to go back to Ask-an-Expert index page.