Tax Calculation GST and QST 2017 in Quebec | Quebec Tax Calculation

After having started your business, you have decided to register your business for the GST and QST. Our consulting agency, JKB Services, can assist you in this process and provide you with all the help you need. You should know that this step is crucial for the development of your business, because it is only after that it can exercise legally and have a specific status. More details on this.

Registration for GST and QST files

To register for the GST and QST, four methods are available to you:

  • Use of the online service relating to the registration of a start-up business (withholding taxes and corporate income tax, GST, QST and other taxes)
  • Use of an online service relating to the registration of a business in the files of Revenu Québec
  • Call to site customer service
  • Completion of a registration request form.

In case you are not familiar with the formalities involved in legalizing a business, we can help you as we are good at providing accounting services.

Note that before making your first taxable supply in Quebec, you must submit a request for registration in the QST file. This is mandatory if you are not acting as a small supplier. After registering, you immediately collect QST.

Also be aware that before the 30th day following your first taxable supply with a status other than small supplier, you are required to submit a request for registration in the GST file.

QST and GST declaration

Once you are registered for the GST and the QST, you are required to file a related return for each reporting period. This declaration must be made even though you do not benefit from any reimbursement or that you do not owe any sum. As the QST and GST are administered by Revenu Québec, you can choose to make only one return that includes GST / HST and QST.

Note that penalties are applied in case of delay. These penalties relate to non-production or to interest. To avoid them, do not hesitate to periodically consult the various payment schedules relating to these taxes. These calendars, you can consult them here. Also be aware that a penalty is also applied in the event that you have not submitted your returns electronically when you are required to do so.

We believe that the Government of Quebec and the Government of Canada are working closely together. Thus, Revenu Québec takes care of the administration of the GST in Quebec. If you have established the head office of your business in this city, you must contact Revenu Québec to register for the GST but also for the QST file.

The advantages of registering for GST and QST

In addition to carrying out your activities legally, registering your business for the GST and QST gives you access to a number of advantages, including your credibility with your customers. Also be aware that by paying these taxes, you are entitled to recover them from the products and services you sell. In other words, the GST is refunded to you in the form of an input tax credit (ITC) and the QST in the form of an input tax refund (ITR).

How do you know if you should collect the tax?

If you want to know whether or not you have to collect QST and GST, determine the nature of the sale you make when you supply a good or a service to a customer. Indeed, there are different types of sale namely taxable sale, zero-rated sale and exempt sale.

Taxable sale:

Taxable sale qualifies any sale to which a tax applies. Note that most sales are taxable and require you to collect GST and QST. Taxable sales also entitle you to ITCs and ITRs.

Zero-rated sale:

The zero-rated sale, as the terms indicate, is taxable at 0%. When you make this type of sale, you don't have to collect GST and QST. Among the goods and services to which this type of sale applies are:

  • Certain passenger or freight transport services;
  • Financial services, in the QST regime Basic food products;
  • Most agricultural and fishing products;
  • Certain goods or services shipped outside Canada or Quebec;
  • Prescription drugs;
  • Certain medical and assistive devices.

The exempt sale:

Exempt sales mean any non-taxable sale. This type of sale does not require the collection of either the GST or the QST. Examples of exempt sales include:

  • the rent of a residential lease for a period of at least one month;
  • charities, hospitals, universities);
  • most financial services, under the GST regime;
  • certain educational services;
  • certain services rendered by public sector bodies (eg governments);
  • Exempt sales do not entitle you to ITCs or ITRs;
  • apartment buildings that are not new when sold (for example, a
  • house, condominium, apartment building);
  • most childcare services;
  • most health services, especially dental services.

How to calculate the taxes?

The Quebec tax calculation depends on the calculation method adopted by your cash register. If the latter performs the calculation in two steps, the rate you must use to calculate the QST is 9.975%. Thus, the GST is calculated at the rate of 5% on the sale price. Subsequently, the cash register will also calculate the QST on the sale price. If your caisse does not process figures with three decimal places, you can round the percentage to 9.97%.

Also, if your cash register calculates GST and QST in one step, you should use the rate of 14.975% to calculate the two taxes. The amount obtained will then include GST and QST. A rounding of the rate to 14.97% is also possible if your fund does not take three decimal places into account.

For more information, do not hesitate to contact the JKB Services team for your accounting services in Montreal and your tax services in Montreal.

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