Taxes provide funding for Québec’s public services and social programs. Read on to learn more.
What is income tax?
The income tax that individuals and businesses pay helps finance public services and social programs.
For most people, income tax is withheld from their wages throughout the year.
Self-employed workers, however, sometimes have to pay their income tax and their contributions and premiums in quarterly instalments.
Québec’s tax system is based on the idea of self-assessment, which means that you are responsible for reporting your income and paying any amounts you owe the government. To do so, you must file a yearly tax return showing your income. The return also helps you determine whether you’re eligible for any tax credits and deductions, as well as calculate your tax refund or balance due.
Deductions and tax credits reduce your income tax and can even result in a refund.
Deductions are subtracted from your taxable income (the income used to calculate your income tax). Some are for expenses incurred to earn income (for example, work from home expenses), while others are for retirement savings (for example, RRSP contributions). They all have their own eligibility requirements.
There are two kinds of tax credits:
Non-refundable tax credits reduce or cancel your income tax payable.
Refundable tax credits can result in a refund if they exceed your income tax payable. You can get them even if you don’t have any income tax to pay.
To find out whether you’re eligible for deductions and tax credits, claim them in your tax return.
Every year, more than half the people who file a tax return get a refund.
What is sales tax?
Like income tax, sales tax provides funding for public services and social programs.
Most of the goods and services we pay for are taxable.
Businesses charge sales tax (including the Québec sales tax or QST) on the goods and services they sell, then remit the tax they collected to us.
Taxable goods and services include:
cars (purchase or lease)
meals at a restaurant
cell phone plans
Not at all. Many are zero-rated, which means you don’t have to pay tax on them.
Most food and beverage items are zero-rated. But beware! They become taxable when they are sold in individually-wrapped servings for immediate consumption or sold in a vending machine.
For example, cakes, muffins, cookies and other pastries are taxable when sold in packages of less than six individual servings, but zero-rated when sold in packages of more than five individual servings.