The GST-QST and the bar and restaurant sector
With the tabling of its 2006-2007 budget, the Quebec government announced measures to counter tax evasion in the restaurant sector. These rules, which provide for the mandatory use of a sale recording module (SRM), apply to most restaurants since November 1st, 2011.
For some time now, following the implementation of these rules, Revenu Quebec is using the data collected with the SRM when auditing a restaurant for indirect tax purposes. Yet, these GST/QST audits may also have an impact for income tax purposes since they involved recorded sales.
According to these rules, under the QST regime, a restaurant operator has the obligation to provide an invoice generated through an SRM to all clients to whom he supplies goods and services, even in cases where the supply is free of charge. Copy of the invoice has to be kept. Moreover, a periodic sales summary (SPV), generated through the SRM, has to be kept and transmitted to Revenu Quebec.
An SRM is a microcomputer to which a safety device has been added. It has to be connected to a cash register or a point-of-sale system. It is also required that it be connected to a receipt printer.
The invoice has to be remitted at any time to the client without delay, and not only on demand. There is the same obligation in the cases of a delivery or a take-out order.
Restaurants to which the mandatory billing measures are applicable should make sure that the invoice contains the prescribed information, that at all time an invoice is remitted to his clients and that copy of the invoices is kept during the following six years, on paper or electronic format. When these measures are not followed, penalties can be charged as well as significant fines in case of relapse.
In the case of ARQ v. 2849-1827 Québec inc. (2014 QCCQ 6034), a Revenu Québec representative ordered a pizza to be delivered at his house. A written invoice is given to him that was not issued through the SRM. The evidence showed that the usual cashier had been replaced by a friend who did not know how to operate the cash register connected to the SRM. The usual cashier came back later and entered the invoice through the SRM, about 40 minutes after the transaction. It has been decided that this was a strict liability type of offence and that the invoice had not been registered and provided “without delay” as required by law. The restaurant owner has therefore been ordered to pay a fine for two different offences, for a total of $2,400.
In the case of ARQ v. Vriniotis (2015 QCCQ 5220), a restaurant selling from the counter had put beside the cash register printer a sign saying « PRENEZ VOTRE FACTURE SVP » (“PLEASE TAKE OUT YOUR INVOICE”). It has been decided that the obligation to “provide” the invoice to the client had not been met and the restaurant owner was ordered to pay $300 penalties for both offences.
New rules in 2016 for the bar operators
Starting on February 1st 2016, the mandatory billing measures will apply to bar operators and to the individuals who usually provide the supply of goods and services in a bar. Some transitional measures might already apply.
The Quebec government is offering a program to help the bars and resto-bars and the persons required to acquire or install new devices in order to comply with the obligation to provide invoices issued by an SRM. Detailed information is available on the Revenu Québec's website.
For more information, see these links below.
- Revenu Québec, Bulletin d’information destiné aux exploitants d’établissements de restauration, September 2014
- Revenu Quebec, SRM User Guide, August 2013.
- Revenu Québec, Mandatory Billing Information, August 2015.