Sales Taxes

All sales, rentals and other supplies of goods, services and property by the University must be examined to determine the applicability of each tax. The rules that significantly impact University activities are outlined below.

The following activities are not subject to GST/HST and QST:

• Donations of money to McGill;
• Donation “in kind”, where it is not a part of a barter transaction;
• Services rendered by an employee to an employer;
• Fines and penalties;
• Self-Supply (i.e. all inter-departmental charges within McGill);
• Grants that have no strings attached (e.g. no reporting requirements other than financial reporting, or services rendered to the granting agency).

Taxes paid on all University expenses are generally recoverable in whole or in part. For purchases that support exempt activities (e.g., teaching), the University is entitled to 67% rebate of GST as well as HST (of the federal portion) paid and 47% of QST paid. For purchases that support taxable or zero-rated activities, a 100% Input Tax Credit is available for each tax. For departments that have a predictable mixture of exempt, taxable and/or zero-rated supplies, a blended rate can be established to yield a higher rebate on taxes paid for purchases. Blended return rates are set on a fund by fund basis.

Purchase Requisitions

Purchase requisitions allow for identification of tax status of the goods or services being purchased, typically determined by vendor but is overrideable if required. The reservation amount includes the full tax amount. The subsequent Purchase Order will also encumber the full tax amount.

Invoices processed via Accounts Payable

All goods purchased and services paid for are taxable, regardless of whether or not GST and QST appears on an invoice:

1. As long as a good or service is to be used/consumed in Canada, GST must be charged and remitted to the Government.
   • If an invoice includes an amount for GST, it is paid to the Supplier.
   • If an invoice from a Canadian company shows no GST, Accounts Payable will determine if self-assessment is required.
   • If an invoice from a non-Canadian company shows no GST, and the item is tangible, (equipment) and coming through customs, it is charged to the fund through our broker, Thompson Ahern International. Accounts Payable will assess GST on non-tangible items that do not clear customs. Ex: maintenance contracts, license agreements.
2. In addition to GST, as long as a good or service is to be used/consumed in Quebec, QST must be charged and remitted to the Government.
   • If an invoice includes an amount for QST, it is paid to the Supplier.
   • If an invoice from a Quebec company shows no QST, Accounts Payable will determine if self-assessment is required.
   • If an invoice from a non-Quebec company shows no QST, then Accounts Payable assesses the QST at the current rate and the University remits the tax to the Government. (some exceptions apply)

Travel and Other Personal Reimbursements

Taxes paid on travel and other personal reimbursements must be segregated by the claimant in order for the rebate and/or tax credit to be claimed. Detailed instructions with respect to sales taxes can be found in the Procedures for Travel and Other Reimbursable Expenses on the Financial Services website.