MONTREAL, July 12, 2013 /CNW Telbec/ - The Regroupement des cabinets de
courtage d'assurance du Québec (RCCAQ) welcomes the measures announced
yesterday by Nicolas Marceau, Quebec's Minister of Finance and the
Economy, aimed at mitigating the negative impacts of QST/GST
harmonization, which went into effect on January 1, 2013. These
measures include abolishing the compensation tax and introducing a
temporary refundable tax credit for damage insurance brokerages.
"Quebec-based brokerages, most of which are small businesses, have been
hard hit by QST harmonization, which represents an additional operating
cost of nearly 10% of their taxable expenditures. We are relieved that
Mr. Marceau realized the full implications of this situation and took
concrete measures to rectify it," said RCCAQ chair Michel Duciaume.
Since the beginning of the year, brokerages had no longer been able to
claim a refund of the QST they pay on purchases of goods and services
they need to carry out their activities; this refund policy had been in
place for nearly 20 years. That was one of the insidious effects of the
QST/GST harmonization agreement signed in October 2012.
Compensation tax is abolished
Insurance brokers will no longer be required to pay the temporary
contribution by financial institutions, retroactive to January 1, 2013.
Temporary refundable tax credit introduced for damage insurance
The tax burden of all financial services providers was increased when
the QST was harmonized with the GST/HST regime, although damage
insurance brokerages were especially hard hit due to the
particularities of their industry. The new refundable tax credit, which
will be in effect for a three-year period, will ensure that the
transition is smoother than it currently is for these brokerages.
"Since this temporary measure only runs until 2015, we would like to
pursue the dialogue we entered into with the Ministry of Finance and
the Economy in order to identify potential solutions that may be
brought in after that deadline. In that regard, the measures taken by
the Minister today bode well for the future, and we are confident that
we will find a basis of agreement for a long-term solution to this
situation," said Mr. Duciaume.
The RCCAQ is a professional association that seeks to promote and defend
the socio-economic interests of its member brokerages. It represents
4,500 insurance brokers based in 615 brokerages and branch offices
across the province.
SOURCE: Regroupement des cabinets de courtage d'assurance du Québec
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