Skip to content
Standart Sales Tax Rate
9.775%
Reporting currency
CAD

International VAT Guides Canada – Quebec

GST Framework Canada

As emphasized in our previous Canada VAT Guide, the indirect tax framework is very different from the tax systems that are in place in the EU countries or other European countries that aren’t part of the EU community. 

In Canada, we have a federal tax, GST, levied across the country at a rate of 5% on the supply of goods and services. It functions based on VAT, and it’s applied at each level in the production and distribution chain. 

Five provinces (New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island) have harmonized the provincial sales tax (PST) with the Federal GST. Combining these two types of taxes is called Harmonized Sales Tax (HST). 

There is no differentiation in registration, collection, and remittance in these provinces between the federal part of the GST and provincial sales tax. One registration covers all provinces that have HST in place.  

However, some provinces haven’t signed the agreement to establish the adoption of HST. These provinces, British Columbia, Manitoba, and Saskatchewan, each levy a provincial retail sales tax separately and in addition to the federal GST. 

These provinces levy a PST on the supplies of goods or provision of services made within the province. This province-based type of tax isn’t recoverable like VAT. Businesses paying PST cannot claim input tax credits for their business expenses. 

The local tax authority administers provincial sales tax in these provinces, separately from the federal Canadian Revenue Agency. 

Quebec Sales Tax 

To underscore, the province of Quebec has a Quebec Sales Tax (QST) imposed on the level of provincial sales. Practically speaking, the supplies of goods or services that have the place of supply in Quebec, if treated as taxable under federal GST rules, most probably are taxable under QST Canada rules. 

In this situation, the suppliers of taxable goods or providers of taxable services are obligated to levy QST Canada on these supplies and charge, collect, and remit both GST and QST. The Quebec Revenue Authority administers the QST. 

The registered taxable persons should levy GST and QST on the taxable sales they render in the province. Quebec Sales Tax rate is 9.775%. Compared to PST, imposed within provinces that haven’t adopted the HST approach, QST in Canada has a structure similar to VAT. 

This approach permits taxable persons to deduct the input tax credits from tax payable when they make taxable purchases for their business activities. 

Quebec’s Revenue Authority also administers GST duties of resident taxable persons. 

Quebec Sales Tax(QST)

Canada QST rate 

Persons registered for GST/HST and QST or should be registered are obliged to levy taxable supplies made in Quebec the QST in addition to the GST, except when the supply is zero-rate or tax-exempt. 

How much is QST in Canada? 

QST rate Canada: Quebec Sales Tax is 9.775%. Some supplies are zero-rated or tax-exempt, for which QST isn’t levied. 

Canada QST rateRate TypeCoverage and imposition
9.775%Standard RateThe Quebec Sales Tax rate applies to all supplies except those that are zero-rated or tax-exempted
0%Zero RateBasic groceries; specific medical devices; exports; international passenger air travel; prescription drugs

Tax ExemptExemptedDifferent types of educational services; most services provided by financial institutions; long-term rentals of residential accommodation

QST threshold in Canada

The Quebec Sales Tax rules define that suppliers of taxable goods and services must register for QST from the first taxable supply if their status isn’t part of the small supplier scheme. 

QST registration threshold for resident businesses: worldwide turnover of CAD 30,000 within four consecutive calendar quarters or quarterly.

QST registration threshold for non-resident businesses: Non-resident businesses that carry over a business in Canada usually have the following threshold applied to their supplies – CAD 30,000 within four consecutive calendar.   

QST registration threshold for foreign providers of digital services: Non-resident digital services providers(direct suppliers or digital platforms) should register for QST when the turnover on specified supplies surpasses the threshold of CAD 30,000 in any 12-month.

QST Taxable Activities in Quebec

Types of taxable activities that mandate the QST registration:

  • Supply of goods and services for consideration;
  • Exports;
  • Imports of goods and services; 
  • Supply of defined digital services. 

Tax Representative in Canada 

Non-resident providers of digital services or products generally don’t need to appoint a local tax representative to fulfill their GST/HST compliance responsibilities.

Tax registration 

General Registration Regime

Persons registered under the standard regime should collect the QST on all taxable supplies they make in Quebec for B2C and B2B transactions. Digital platform operators are obliged to collect QST on taxable supplies made by suppliers that have a place of business outside Quebec. 

Taxable persons registered under the general regime in Quebec should submit their return declaration to the Quebec Revenue Authority electronically. Vendors registered under the general QST regime can claim input tax credits for business purchases. 

Vendors whose place of business is outside the Quebec province, who are registered under the general GST/HST system, and who are required to register under the simplified QST system could have a possibility of registering under a specified QST registration regime if they meet specific requirements.

Simplified tax registration 

Non-resident providers (on the level of Canada, not just Quebec) should register under the specified registration regime when they make taxable goods or services to Quebec-based customers. They aren’t registered under the general registration regime when they surpass the threshold of CAD 30,000 for their direct supplies. 

Collected QST amounts should be reported to the Quebec Revenue Authority, and the taxable person registered under the specified regime cannot claim input tax credits.

The suppliers based outside Quebec that are registered under the general GST/HST system and that make taxable supplies to customers based in Quebec are mandated to register under a specified registration regime. 

However, there are cases where the suppliers registered under the general GST/HST regime that are a priori mandated to register under a specified registration regime can opt for registration under the general regime.

QST on Electronically Supplied Services 

Digital Services

The digital suppliers whose place of business is outside Canada are mandated to register for QST under the specified QST regime when the conditions are met, i.e., when the threshold is reached. 

Digital platform operators registered under the specified QST regime must collect and remit QST that suppliers not registered under general QST make to Quebec customers.

How much is QST in Canada for cross-border digital services?

Quebec Sales Tax rate: Quebec Sales Tax rate for providing intangible goods or digital services is 9.775%. 

Taxable Digital Services in Quebec

Suppliers based outside Canada that aren’t registered under the general GST/HST regime are obliged to register under the simplified regime when they surpass the threshold of small suppliers for the taxable supplies of the following digital goods or services: 

  • Software, including applications, programs, and downloadable software E-books or digital publications;
  • Video streaming services, video downloads, and digital videos; 
  • Stock photos, digital artwork;
  • Online storage, file hosting, and cloud computing services; 
  • SaaS; 
  • Intermediation services.

Digital Platform Operators Rules

Digital platform operators that aren’t residents for tax purposes in Quebec should register under a specified tax regime if they have surpassed the threshold reserver for small suppliers. The calculation of the threshold is based on the calculation of taxable supplies: 

  • The digital platform operator isn’t registered under the general GST/HST regime;
  • Make taxable supplies of goods or services to customers based in Quebec (that aren’t QST registered under the general regime);
  • Third-party supplies made by vendors not registered under the general QST regime;
  • Delivery of goods that are in free circulation in Canada supplied through the platform by third-party vendors who aren’t registered under the general QST regime;
  • They make taxable supplies of goods or services to customers based in Quebec (that aren’t registered under the general Quebec regime).

Invoicing Rules

The general GST and QST rules should be followed when non-resident providers of digital services or platform operators (when the terms are met) issue an invoice or receipt to the recipient of a digital service/product based in the country.

Invoice Requirements in Canada 

The pdf invoice should at least contain the following:

General information: 

  • Date of invoice issuance; 
  • Date and time of supply;
  • Unique invoice number from consecutive series.

Seller information:

  • Company name;
  • Full address (head office);
  • Billing address if different from company address;
  •  QST number.

Customer information:

  • Name; 
  • Full address;
  • QST number (if applicable).

Fiscal Information:

  • Tax amount for each type of goods or services supplied;
  • Federal Tax Rage;
  • QST tax rate;
  • Type of the transaction by reference to the categories indicated in the GST rules;
  • Total tax  amount; 
  • Invoice Total tax exclusive;
  • Rate of any discount;
  • Total invoice amount. 

Foreign Currency Invoice in Quebec

In most cases, the invoice should be issued in national currency. When permitted to be issued in foreign currency, the GST/HST, total, and price of goods/services should be indicated in local currency.  

QST return 

Standard Return 

Taxable persons registered under the general QST regime should collect QST on all taxable supplies they make in Quebec (excluding zero-rated supplies). These suppliers should remit standard combined GST/HST-QST returns based on allocated frequency. 

Starting January 1, 2024, these returns should be filled exclusively electronically.

Simplified Return

Taxable persons registered under a specified QST regime must collect and report QST based on the specified reporting procedure. The reporting period for these taxable persons is a calendar quarter. 

Non-resident businesses registered under the simplified registration regime should file and remit tax under simplified reporting rules. The reporting period for the non-resident businesses registered under the simplified procedure is a calendar quarter. 

These economic operators should file and remit tax until the end of the month following the reporting period. 

GST/HST-QST Specified Reporting

Return NameSpecified GST/HST-QST return
Filling frequencyQuarterly
Online FillingMandatory
Annual ReturnNo
Filing deadlineEnd of the month following the reporting period
Payment deadlineEnd of the month following the reporting period
Payment currencyCAD; USD or EUR if accepted
LanguageFrench/English
Local VAT acronym QST

Penalties for late reporting and omitted declarations 

Fines and penalties according to Quebec Sales Tax rules:

Taxable persons registered for QST should be aware of the following penalties if they fail to remit or pay QST by the following deadlines:

  • 7% of the amount of the payment or remittance is no more than 7 days late;
  • 11% of the amount of the payment or remittance is 8 to 14 days late;
  • 15% of the amount of the payment or remittance is more than 14 days late.

Need assistance with VAT in Canada?
We can help!

icon

Dedicated account manager

As our client, you will be assigned to a multilingual account manager who can address all your tax-related inquiries and resolve any issues you may have at any time.

icon-2

Single point of contact

We serve as single point of contact, simplifying the process and ensuring that your VAT compliance is handled efficiently and effectively within single stop.

icon-3

Exclusive customer service

We support our clients, ensure fast response time and always go beyond by offering tailored assistance and individual attention.

icon-4

Certified experts

Our team is combined of more than 40 experts, who can provide wide range of services and are certified members of IVA, AITC and VAT Forum. Currently we have more than 800 clients and knowledge how VAT works in 100 locations.