GST and QST are two of the most misunderstood obligations for Quebec business owners.
Not because they’re complicated in theory — but because the rules have enough nuance that small mistakes can cost you thousands of dollars in penalties, missed refunds, or both.
What Are GST and QST?
GST (Goods and Services Tax) is a federal tax of 5% charged on most goods and services sold in Canada. It’s administered by the CRA.
QST (Quebec Sales Tax) is a provincial tax of 9.975% charged on most goods and services sold in Quebec. It’s administered by Revenu Québec. Together, they add up to 14.975% on most taxable transactions in Quebec.
When Do You Need to Register?
You must register for GST/QST when your business revenue exceeds $30,000 in a single calendar quarter or over four consecutive quarters. Once you exceed $30,000, you must register within 29 days.
You can register voluntarily even if you’re below $30,000. This makes sense if you have significant business expenses — registration allows you to claim Input Tax Credits (ITCs) and Input Tax Refunds (ITRs).
How Filing Works
| Annual Revenue | Filing Frequency |
|---|---|
| Under $1.5M | Annual (with quarterly or monthly option) |
| $1.5M – $6M | Quarterly |
| Over $6M | Monthly |
Input Tax Credits (ITCs) and Input Tax Refunds (ITRs)
This is the part most business owners don’t fully understand — and where the real money is.
When you’re registered for GST/QST, you don’t just collect tax from your customers. You also get to recover the GST/QST you paid on your own business expenses. These recoveries are called Input Tax Credits (ITCs) for GST and Input Tax Refunds (ITRs) for QST.
If you pay $1,000 in GST on business expenses in a quarter, you subtract that $1,000 from the GST you collected from customers. You only remit the difference.
Common Mistakes to Avoid
Mistake 1: Not registering on time. Once you hit $30,000, the clock starts. Register within 29 days or face penalties.
Mistake 2: Missing ITCs/ITRs. Every dollar of GST/QST you paid on business expenses is recoverable. Missing these claims means you’re overpaying.
Mistake 3: Applying the wrong tax rate. Not everything is taxable at 14.975%. Some supplies are zero-rated (0%) or exempt. Applying the wrong rate creates compliance problems.
Mistake 4: Not keeping receipts. CRA and Revenu Québec can disallow ITC/ITR claims without proper documentation.
