How to Recover QST Paid on Company Vehicles and Fuel — A Montreal CPA Firm

Recovering QST on company vehicles and fuel is one of the most misunderstood areas of Quebec tax law. Businesses routinely leave thousands of dollars unclaimed each year because they do not understand which fuel expenses qualify, how to calculate the recoverable portion, how vehicle-use restrictions work, or how Revenue Québec audits vehicle-related expenses.
Even worse, incorrect recovery of QST on fuel and vehicles can trigger refund freezes, denied ITRs, trust-fund investigations, and full GST/QST audits. Revenue Québec closely monitors fuel expenses because businesses frequently mix personal and business use, claim credits without proper logs, or use receipts that do not meet legal requirements.
As a Montreal CPA firm with more than 35 years of combined professional experience, Mackisen CPA Montréal created this comprehensive guide to help you recover the QST you are entitled to—without triggering audit risk.

Primary keywords: recover QST vehicle fuel Quebec, QST refund company vehicles, QST ITR fuel rules
Secondary keywords: Quebec vehicle tax rules, QST recovery audit risk, Montreal CPA vehicle expense compliance

Why This Matters

Vehicle and fuel expenses are high-risk categories because small mistakes compound over the entire year. Most businesses fail to recover QST correctly due to
• lost fuel receipts
• invoices missing required tax information
• mixing personal and business use
• inadequate mileage logs
• incorrect application of restricted ITR rules
• claiming QST on passenger vehicles not qualifying for full recovery
• failing to classify vehicles correctly
• misreporting capital cost allowance vs ITR rules
• relying solely on accounting software without verification
These mistakes result in lost refunds, denied credits, tax reassessments, refund freezes and potential full-scale QST audits.

Legal and Regulatory Framework

QST recovery on vehicles and fuel is governed by
• the Quebec Sales Tax Act
• the Tax Administration Act
• Revenue Québec ITR rules
• GST/HST harmonized rules when applicable
• vehicle classification regulations
You must determine QST recovery eligibility based on
• vehicle type
• business-use percentage
• fuel type
• documentation quality
• whether the business is a large business under Quebec rules
Courts have repeatedly reinforced strict enforcement.
Prokofiew confirms taxpayers must prove every input tax refund.
Lac d’Amiante confirms missing or incomplete documents justify denial.
Aikman reinforces that invoices must contain exact legal information.
Global Cash Access confirms Revenue Québec may reconstruct consumption and disallow credits without documentation.
Vehicle-related ITRs are among the most commonly denied credits in Quebec.

QST Is a Refundable Credit, But Vehicle Rules Are Highly Restricted — Errors Create Audit Risk

Although QST on business expenses is recoverable through ITRs, the rules for vehicles are much stricter.
Recovering QST incorrectly can trigger
• denial of all ITRs claimed on the vehicle
• penalties and interest
• refund freezes
• intensive audit of mileage logs
• verification of personal use vs business use
• reassessments covering multiple years
• forced repayment of previously claimed refunds
When vehicle expenses are wrong, Revenue Québec assumes everything else may also be wrong.

The Mackisen Step-by-Step Guide to Recovering QST on Company Vehicles and Fuel

1. Identify the Type of Vehicle Before Claiming Any QST

Different rules apply to different vehicle categories. You must classify the vehicle correctly as
• passenger vehicle
• zero-emission vehicle
• commercial vehicle
• motor vehicle used primarily to earn income
• vehicle used by owner, shareholder, employee, or contractor
Passenger vehicles have the strictest restrictions under QST law.

2. Determine the Business-Use Percentage with Audit-Proof Documentation

Revenue Québec requires documentary proof of business-use percentage, including
• mileage logs
• trip purpose records
• odometer readings
• dispatch or client schedules
Without these, Revenue Québec may reject all QST recovery claims.

3. Collect Valid Fuel Invoices That Meet QST Requirements

Fuel receipts must include
• supplier name and address
• QST registration number
• purchase date
• quantity purchased
• description of fuel
• QST amount
• payment proof
Debit transactions alone are NOT valid documents.

4. Apply QST Restrictions Correctly for Large Businesses

Large businesses face additional restrictions for QST recovery on
• road vehicle fuel
• passenger vehicles
• certain repair and maintenance expenses
If you apply the wrong rules, your ITR claim will be denied.

5. Distinguish Between Personal and Business Fuel Consumption

Revenue Québec closely audits hybrid-use vehicles.
You must exclude
• personal mileage
• commuting between home and office
• trips not directly related to income generation
Claiming QST on personal use triggers reassessments.

6. Calculate Recoverable QST Using the Correct Method

Depending on the vehicle, you must determine whether
• full QST is recoverable
• only a percentage is recoverable
• no QST is recoverable
Errors here are extremely common and costly.

7. Apply QST on Capital Purchases and Depreciable Vehicles Correctly

For vehicle purchases, you must
• calculate the appropriate QST recovery
• adjust capital cost allowance (CCA)
• apply large-business restrictions when applicable
• maintain proof of purchase
Miscalculations lead to multi-year reassessments.

8. Reconcile QST Recovered to QST Paid

You must reconcile
• total QST paid on fuel
• total QST paid on vehicle expenses
• business-use portion
• recoverable ITRs claimed
• adjustments for personal use
Revenue Québec performs this reconciliation automatically during audit.

9. Maintain Digital Audit-Ready Documentation for Six Years

You must keep
• every fuel receipt
• every repair invoice
• vehicle purchase agreements
• mileage logs
• business-use calculations
• payment records
• ITR worksheets
Failure to produce any document results in denial.

10. File ITRs Accurately in FPZ-500-V Returns

Your QST refund claims must match
• documentation
• reconciliations
• vehicle classifications
• business-use percentages
• fuel usage patterns
If anything appears inconsistent, your refund is frozen until review.

Recent Quebec Audit Trends for Vehicle and Fuel QST Recovery

Revenue Québec now uses
• odometer verification requests
• GPS and telematics data
• fuel card consumption analysis
• POS receipt matching
• bank deposit vs expense matching
• automated personal-use detection algorithms
• large-business ITR rule enforcement
Vehicle and fuel audits have increased significantly in the last two years.

Benefits of Proper QST Recovery on Vehicles and Fuel

Proper compliance ensures
• maximum legal refunds
• reduced audit exposure
• accurate financial statements
• clean tax records
• no penalties
• no freezing of refunds
• protection against retroactive reassessments
This is essential for cash flow and compliance.

Compliance Requirements for Recovering QST on Vehicles and Fuel

You must
• maintain valid invoices
• track business-use percentage
• classify vehicles correctly
• apply restricted ITR rules properly
• reconcile QST regularly
• maintain full documentation
• file accurate FPZ-500-V returns
Non-compliance triggers QST recovery denial and audit escalation.

Do and Don’t Based on Audit Findings

Do
• maintain detailed mileage logs
• keep digital copies of all receipts
• reconcile fuel expenses monthly
• verify supplier QST numbers
• classify vehicles before claiming
Don’t
• claim QST on personal use
• rely solely on accounting software
• mix personal and business expenses
• discard fuel receipts
• guess business-use percentages

Common Mistakes in QST Recovery on Vehicles and Fuel

Businesses frequently
• claim QST without logs
• lose fuel receipts
• misclassify passenger vehicles
• fail to apply large-business restrictions
• overclaim ITRs
• miscalculate percentages
• fail to exclude personal mileage
• include non-fuel items as fuel costs
These errors lead to denied refunds and multi-year reassessments.

Winning With Revenue Québec

Mackisen provides
• vehicle and fuel QST recovery calculations
• audit-ready documentation systems
• mileage log setup
• classification of vehicles
• reconciliation of QST paid vs QST recovered
• FPZ-500-V correction filings
• representation during audits
With over 35 years of combined CPA experience, our firm ensures your QST recovery is accurate, defensible, and compliant.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montréal ensures your QST recovery on vehicles and fuel is maximized while protecting you from penalties, trust-fund exposure, and audit risk. We secure your refunds, safeguard your compliance, and help your business operate with confidence and precision.