As of February 2016, under a new measure announced in the
Action Plan in Response to the 2014-2015 Ombudsman Annual
Report, Revenu Québec ("RQ") has the
administrative discretion to stay collection actions when an
objection or an appeal is brought to a Québec Sales Tax
The Tax Administration Act
("TAA")1 legislatively provides for the stay
of collection actions in the case of Québec income tax
assessments, with the exception that for "large
corporations"2 the stay only applies to one half of
the amount assessed. In the case of QST assessments, however, the
taxpayer was required to pay the full amount assessed to be able to
proceed with the objection and subsequent appeal, if any.
Under this new policy, the taxpayer who is assessed for the
failure to collect QST or who has been denied input tax refunds
("ITRs") may request a stay of all collection actions
while the objection or appeal is in progress, provided that the
taxpayer has otherwise complied with its other Québec tax
obligations (including income or payroll taxes) and the recovery of
the debt is not in jeopardy. Where a stay is granted, any
outstanding ITRs will no longer be applied to the tax debt, but
will instead be refunded to the taxpayer.
This administrative concession is in line with the Canada
Revenue Agency's ("CRA") administrative guidelines
for postponing collection procedures pending the resolution of an
objection or appeal provided for in section 315 of the Excise
Tax Act. Under these procedures, the CRA will postpone
collection actions without requiring security in the following
the taxpayer has an otherwise
satisfactory compliance history;
there is no published departmental
policy about the assessed matter;
there are reasonable differences in
the interpretation of the legislation;
the taxpayer has not collected the
GST relating to the assessment from its clients;
the business is financially secure;
there are extraordinary circumstances
(e.g., fire or flooding).
The internal policies of RQ's collections department are not
publicly available. However, our experience with the new policy
leads us to conclude that RQ will apply the policy in a similar
manner to how the CRA applies its analogous policy. More
particularly, the policy seems to be applied where the taxpayer can
show that it has arguments that would lead RQ to vacate the
assessment and it establishes that it intends to object to or
appeal from the assessment.
It is the taxpayer's responsibility to request the stay on
collection measures either verbally or in writing with the
The suspension of collection measures remains in force for the
duration established by the collections officer unless RQ believes
its ability to collect on the debt is compromised. In our
experience, separate stays must be requested at each stage (e.g.,
for the 90-day delay to object, for the delay for the objection to
be determined, etc.).
1. See sections 12.0.2 and 12.0.3 of the TAA, CQLR, c
2. Defined at section 1.2.1 of the TAA,
3. GST/HST News, No. 22, Fall 1996.
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