Tax refund for QST purposes: A win for environmental companies

Montréal, September 10, 2021 – On June 30th, the Court of Appeal ruled in favor of the Centre de traitement de la biomasse de la Montérégie inc. (CTBM), represented by Martin Delisle, Tax Litigation partner, in a tax dispute regarding the Quebec sales tax (QST). In a unanimous decision, Quebec’s highest Court recognized that the consideration of environmental obligations related to fertilizing residual materials is included in the notion of “sale” for the purposes of applying the Act respecting the Québec sales tax regarding tax refunds for large businesses.

This decision of the Court of Appeal represents an important turning point for businesses operating in the environmental industry that are impacted by the restrictions related to the input tax refund on energy-related expenses. Indeed, the consideration of environmental obligations will now allow these businesses to claim tax refunds for QST purposes.

Click here to read the decision (in French only).

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