Following a request to the minister of Revenue Quebec, we have finally received details concerning the interpretation of the Act representing the Quebec sales tax (AQST), Chapter IV, under paragraph 11 of section 520, the article on tax exemption. Here are the details:

I apologize for the delay in responding to your request for an Interpretation of paragraph 11 of section 520 of the Act respecting the Quebec sales tax (AQST).

You would like to know if all fabriques or churches, regardless of their religious denomination (that is, Catholic, Protestant or other), are eligible for an exemption from the 9% tax on insurance premiums.

Under paragraph 11 of section 520 of the AQST, the tax on insurance premiums does not apply to the premium payable by a fabrique or a trustee of a parish under an insurance policy relating to property used for religious worship or religious activities.

The Ministère du Revenu considers that a fabrique, in its ordinary and common meaning, designates a group of persons named by a bishop to administer property for the purposes of practice of the Roman Catholic religion in a parish. Most often, such a fabrique will be a corporation constituted under the Act respecting fabriques and will be composed of the chairman, the pastor and the churchwardens of the parish. The term "fabrique" also means any equivalent body outside the Catholic Church and legally constituted for identical purposes.

1. any body responsible for the administration of a diocese comprising a group of fabriques, and any equivalent body outside the Catholic Church and legally constituted for identical purposes; and
2. any body responsible for the administration of a basilica recognized as such by the competent authority.

Therefore, if the other conditions under paragraph 11 of section 520 of the AQST are met, the fabriques or churches (churches incorporated under the Religious Corporations Act) that correspond to one of the definitions given above may claim the exemption, regardless of their religious denomination.

Under section 522 of the AQST, a person who reimburses an insurance premium must also reimburse the tax collected in respect thereof. However, under section 21 of the Act respecting the Ministère du Revenu (AMR), where a refund of the tax on insurance premiums applies but the premium is not refundable, the person who paid the tax must contact the Ministère for a refund.

Please note that since March 31, 2004, following the Budget Speech of March 30, 2004, a person who collected an excess amount of tax on insurance premiums can provide a refund even if the premium is not refundable.

Under section 21 of the AMR, a person who paid an excess amount of tax on insurance premiums must submit a written application for a refund to the Deputy Minister by registered mail within four years after the date of payment.

If you have any questions with respect to the above, please contact the undersigned.

I trust this information helps answer your questions.

Lyne Bienvenue
Tax Research Officer -Consumption Taxes