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Quebec Issues Bulletin on Application of Tax on Lodging to Businesses Operating a Digital Platform

Tax Development Sep 05, 2017

Quebec Issues Information Bulletin on the Application of Tax on Lodging with Respect to Businesses Operating a Digital Platform; Announces Groundbreaking Agreement with Airbnb

On August 29, 2017, the government of Quebec issued Information Bulletin 2017-9 “Application of the Tax on Lodging with Respect to Businesses Operating a Digital Platform Offering Accommodation Units” to clarify the rules for digital accommodation platforms, in regards to the Quebec tax on lodging.  Currently, Quebec accommodation establishments charge a 3.5% lodging tax, which is used to fund regional tourism associations.  A digital accommodation platform is an operator which brings together a person offering an accommodation unit and a tourist, and manages the transaction between both parties.  The previous lodging tax framework did not account for these platforms, and as a result, Quebec has made various changes to the system. 

Effective August 29, 2017, digital accommodation platforms may now voluntarily register to collect the tax on lodging. The bulletin outlines some rules relating to this change, including the amount of tax payable on certain supplies, a proposal to deem the unit offered for rent to be offered for rent on a regular basis in the same calendar year when provided by a digital platform, and the cancellation of the voluntary registration.  The bulletin also provides information on relief from the tax on lodging for certain operators of sleeping-accommodation establishments (such as where a digital platform has charged the tax, but the establishment is already registered to collect and remit the tax).

Concurrently, the government of Quebec announced a new agreement with Airbnb, a large international digital accommodation platform, where Airbnb, effective October 1, 2017, will automatically collect and remit the tax on lodging (French only).