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 brokerages
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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