{"id":5168,"date":"2015-10-10T00:00:00","date_gmt":"2015-10-10T04:00:00","guid":{"rendered":"https:\/\/dev-ginsberg-gingras.flywheelsites.com\/will-we-see-more-bars-and-resto-bars-file-for-bankruptcy-in-2016\/"},"modified":"2021-04-13T18:16:19","modified_gmt":"2021-04-13T22:16:19","slug":"will-we-see-more-bars-and-resto-bars-file-for-bankruptcy-in-2016","status":"publish","type":"post","link":"https:\/\/ginsberg-gingras.com\/en\/will-we-see-more-bars-and-resto-bars-file-for-bankruptcy-in-2016\/","title":{"rendered":"Will We See More Bars And Resto Bars File For Bankruptcy In 2016?"},"content":{"rendered":"

As of February\u00a01st 2016, bars and resto bars will be required to generate bills for each transaction by using a sales recording module\u00a0(SRM). Started on September\u00a02nd 2015, the implementation of SRMs will continue until January\u00a031st 2016.<\/p>\n

This measure was initiated by Revenu Qu\u00e9bec in order to prevent tax evasion and recover millions of dollars of unpaid taxes.<\/strong> The organisation thus intends to reduce tax losses by 55% caused by\u00a0poor bookkeeping practices.<\/p>\n

Bars and resto bars forced to convert to follow same rules as restaurants<\/h2>\n

This measure, which will affect bars and resto bars as of February\u00a01st 2016, already applies to restaurants. In force since November\u00a01st 2011, it has allowed Revenu Qu\u00e9bec to recover 76\u00a0million dollars<\/strong> annually.<\/p>\n

In this case, there will be fewer businesses affected by this process\u00a0than in 2011. However, its implementation may prove to be more difficult. Peter Sergakis, President of the Union of bar owners of Quebec\u00a0(UBOQ), states that the officials who initiated\u00a0these plans are unaware of how a bar operates. Mr.\u00a0Sergakis was mainly referring to the particular interactions between customers who, generally in a standing position, move around freely.<\/p>\n

Should we expect more bars and resto bars to file for bankruptcy?<\/h2>\n

Last May, Revenu Qu\u00e9bec sent some information about mandatory billing in the restaurant sector to the Conseil des Syndics de faillite du Qu\u00e9bec. This information included specific instructions on the processing of SRMs in bankruptcy cases.<\/p>\n

It was the first time that this organization provided the Conseil des Syndics de faillite du Qu\u00e9bec with such a guideline. Why? Because Revenu Qu\u00e9bec expects that an abnormally high number of bar and resto bar operators will go bankrupt in 2016<\/strong>. But, will this actually be the case?<\/p>\n

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  1. First, as far back as one can remember, the Food Services sector is one of the three economic sectors experiencing the highest number of insolvencies\u00a0each year. The other two are the construction and the retail trade sectors.<\/li>\n
  2. Statistics from the Office of the Superintendent of Bankruptcy Canada suggests that the implementation of this measure did not have an important impact on restaurant operators. In 2012, 381\u00a0cases of insolvency were recorded in the Accommodation and Food Services sector. That\u2019s only 24 more cases than before the implementation of the SRMs in 2011.<\/li>\n<\/ol>\n

    It is therefore rather difficult to state confidently that the Revenu Qu\u00e9bec measure aimed at bar and resto bar operators will lead them to bankruptcy. An increase in bankruptcies is certainly possible, but other factors must be taken into account.<\/p>\n

    For example, insolvency cases have continued to increase since 2012. They went from 381 in 2012 to 407 in 2013, and then up to 452 in 2014. It is undeniable that the economic slowdown had an impact on the budget people allocated to entertainment. As it is quite often the case in such circumstances, restaurants and bars suffer the consequences of this slowdown.<\/p>\n

    Fines and tax debts<\/h2>\n

    Compliance to\u00a0the law and remitting to\u00a0Revenu Qu\u00e9bec the Qu\u00e9bec sales tax\u00a0(QST) collected should not lead anyone to bankruptcy. However, not complying to such requirements may lead to tax debts and fines and, ultimately, to bankruptcy.<\/strong><\/p>\n

    To avoid fines, bar and resto bar operators will have to comply to\u00a0the following rules:<\/p>\n