Here’s a quiet way non-profits lose money: they pay GST and QST on rent, supplies and services all year, most of what they do is tax-exempt so they can’t claim input tax credits, and they assume that’s the end of it. It isn’t. There’s a separate rebate built for exactly this situation — and a lot of small organizations never file for it.
What the PSB rebate is
The public-service-body (PSB) rebate lets certain organizations recover part of the GST and QST they pay on purchases they can’t otherwise recover through input tax credits. In Québec, Revenu Québec sets the rebate for charities, public institutions and qualifying non-profit organizations at 50% of the GST and 50% of the QST paid on eligible purchases (for activities not tied to a selected public service body). It’s claimed whether or not you’re registered for GST/QST, and it applies to the tax you pay on the exempt side of what you do — the side where ITCs aren’t available.
Who qualifies
- Registered charities — qualify for the rebate automatically, by virtue of being a charity. (See charity vs. NPO if you’re not sure which you are.)
- Qualifying non-profit organizations — an NPO qualifies if its government funding is at least 40% of its total revenue, measured for the current fiscal year or either of the two previous years. Many funded community organizations, associations and service groups clear this bar without realizing it.
- Public institutions — also eligible, at the same 50% / 50% rate in Québec.
If your NPO isn’t government-funded enough to be “qualifying,” the PSB rebate generally isn’t available — but it’s worth checking the 40% test each year, because the mix changes.
How to claim it
You claim the rebate by filing the federal PSB rebate (Form GST66) for the GST side and the Québec PSB rebate (Form VD-387) for the QST side, for each claim period. The mechanics matter:
- You can claim the rebate whether or not you are registered for GST/QST. A registered charity even uses a special net-tax calculation that folds this in.
- You claim on the non-creditable tax — the GST/QST you couldn’t recover as an input tax credit.
- There are time limits to file, so a backlog of unclaimed periods needs to be caught up before the window closes.
Why your bookkeeping decides whether you get it
The rebate is only as good as your records. You need the GST and QST you paid tracked cleanly and separated from the tax you could claim as an ITC, so the rebate is calculated on the right base. Organizations with messy books either miss the rebate entirely or over-claim and invite a reassessment. We set non-profit books up so the PSB rebate is calculated and filed every period — see non-profit bookkeeping, or read how it fits with your Québec filings. Talk to us. General information, not advice for your organization’s specific situation.
Frequently asked questions
How much GST/QST can a Québec non-profit get back?
Charities, public institutions and qualifying non-profits can claim a 50% rebate of both the GST and the QST paid on eligible purchases through the public-service-body rebate.
When does a non-profit qualify for the rebate?
A registered charity qualifies automatically. A non-profit qualifies if at least 40% of its revenue comes from government funding, measured for the current year or either of the two prior years.
Do we have to be registered for GST/QST to claim it?
No. You can claim the PSB rebate whether or not you’re registered. You file the federal (GST66) and Québec (VD-387) rebate forms for each claim period, within the time limits.
Sources
- Revenu Québec – GST and QST rebates for public service bodies (50% / 50% table)
- Revenu Québec – Qualifying non-profit organizations (40% funding test)
- CRA – RC4034, GST/HST Public Service Bodies’ Rebate
- CRA – GI-066, How a Charity Calculates the Net Tax