Usually, when you carry on commercial activities, you are required to register for the GST and QST. Since these taxes influence the method used to enter transactions, it is important to understand how the process works.
The acronyms QST and GST mean “Quebec Sales Tax” and “Goods and Services Tax,” respectively. As a result of an agreement between the federal government and the provincial government, Revenu Québec administers both taxes. Individuals and businesses that are established in Quebec or have a head office in the province must contact Revenu Québec to register for the GST and remit the taxes they collect.
When you are registered for the taxes, you may claim credits in order to recover the taxes you have paid on the goods and services you have obtained for the purpose of running your business.
First, you must determine which type of sale you carry out (taxable, zero-rated or exempt) in order to know whether you are required to register for the taxes¹. Taxable sales, representing most sales carried out during commercial transactions, are sales that are subject to the GST and QST. Zero-rated sales are taxable at the rate of 0%; therefore, you are not required to collect any taxes (e.g., basic food products such as milk). You are not required to collect GST or QST on exempt sales either. Most health and childcare services are exempt sales.
You are required to register for and collect GST and QST in the following cases:
- You are a supplier of goods or services, and your total worldwide taxable supplies (including sales, rentals, leases, exchanges, transfers, barter transactions, etc.) exceed $30,000.00 in a given calendar quarter or in the four (4) calendar quarters that precede the given calendar quarter;
- You are a person who offers a taxi or limousine service, regardless of the annual amount of your taxable sales;
- You are a public service body, and the total worldwide taxable supplies, including zero-rated sales, of the body and its associates exceed $50,000.00 in the current calendar quarter or in the four calendar quarters that precede the current calendar quarter;
- You do not reside in Quebec (or in Canada for the GST), but you charge admission directly to the public for activities or events that take place in Quebec (or in Canada for the GST).
If one of the following cases applies to you, you have certain things to consider. If you are one of the following:
- an individual or a partnership that carries on a business without reasonable expectation of profit, you cannot register for the GST or the QST;
- an individual or a partnership that supplies tax-exempt property or services, you cannot register for the GST or the QST;
- a small supplier², you may choose whether or not to register for the GST and QST;
- a person carrying on activities in specific sectors³, you must register for the QST, regardless of the amount of your taxable supplies, whether or not you are registered for the GST.
You must apply for registration under the QST system before you make your first taxable sale in Quebec otherwise than as a small supplier. You must collect the QST as of the date you are required to be registered.
You must apply for registration under the GST system on the 30th day following your first taxable sale otherwise than as a small supplier. You are required to collect this tax by the same deadlines as for the QST.
To register, you must fill out the Application for Registration form (LM-1) or use the Revenu Québec online service.
You may also register for both taxes by telephone by contacting customer service at 1-(800) 567-4692.
1Gouvernement du Québec, Guide IN-202 Registering for Revenu Québec Files,(site consulted on August 5, 2015)
2 You are considered a small supplier when the total of your sales for the four quarters preceding the given calendar quarter does not exceed $30,000.00.
3 The specific activities in question are retail tobacco product sales, retail fuel sales, alcoholic beverage sales (unless you hold a reunion permit), new tire sales and rentals, and sales and rentals for 12 months or more of road vehicles, whether they are new or used.