Tax Calculator | Quebec Tax Calculation

How to calculate taxes in Quebec

After registering your business, you can be sure that it is publicly known and legally exists by being registered in the Register of the Registrar of Enterprises. After this step, you need to register your company for various files. Once this step is completed, you must be able to calculate taxes or even use a tax calculator. JKB Services, a professional offering accounting services in Montreal can assist you in these tasks. Our team will be happy to accompany you step by step in this process so that everything goes as it should.

What to know about registering for different files

Did you know that businesses and employers must collect various duties and taxes and that they are entitled to deduct at source? Thus, they must calculate the amount due in order to remit them within the deadlines set in advance. They then have the status of agents. In the case of the employer, he must subscribe to one or more files administered by Revenus Québec. These include the GST file, the QST file and the source deductions file.

To register for one of these files, all you need to do is complete the Registration Request form (LM-1) or the Individual in Business Registration Request form (LM-1.PA) and return it. at Revenu Québec. You can download this form from the Revenu Quebec website. It is also available in its offices. If you want to register online, you can use the "Registration of a new business in the files of Revenu Québec" service.

Once you have completed your registration for the QST file, you will obtain a registration certificate which will include, among other things, your identification number as well as the number of your file relating to the QST. After registering for the GST, you will receive a letter attesting to your registration.

If your structure is a corporation, Revenu Québec will give you a tax number. With this number, you will have no problem declaring your business if it is headquartered in Quebec. Note that your number refers to the information you provided in your Registration Request form (LM-1). Your number will be assigned when the Registraire des entreprises informs Revenu Quebec that you have incorporated your company (with a Quebec charter). It can also be assigned to you when you start filing your first corporate income tax return.

The different taxes

There are three types of taxes that you should collect depending on your type of activity. To collect these taxes, you must register for the GST and QST files or the source deductions file. Of course, the choice of which file to subscribe to depends on the type of activity being performed.

GST and QST files

If you supply taxable goods or services, you normally have to collect GST and QST. Note that by registering your company for the GST, it is automatically registered for the harmonious sales tax or HST. This is a tax that applies at the rate of 15%.

Source deductions file

If in your activities you plan to pay wages to employees, you must register as an employer in the withholding tax file.

Note that when you pay a salary or remuneration, you must withhold income tax from your employees' salaries as well as withholdings relating to the Quebec Pension Plan to remit them to Revenu Québec.

In addition, as an employer, you must also pay Revenu Québec contributions to the Health Services Fund, the Commission des normes du travail, the Québec Pension Plan or the National Hand Training Fund. -work.

Calculation of taxes

To calculate the GST and QST, you must adhere to specific rates. If you make a mistake, you risk reducing your profits or, on the contrary, offering a product or service at too high a price. To avoid such a situation, know the GST is calculated at the rate of 7% on the sale price and the QST is calculated at the rate of 7.5% at the price already including the GST.

Here is an example that perfectly illustrates this saying:

If you sell an item 100%, GST will be $ 7 and QST $ 8.03. Thus, the item in question will sell for $ 115.03 incl.

Some details to know

Now that you know how to register for the GST, the QST or the source deductions file, here is some information you should know.

Note that you do not have to subscribe to these files if you are considered a small supplier. In the event that you are a member of a partnership, only the partnership can register.

Note that if the term taxable is used in your registration form, it means both zero-rated and taxable. Thus, if you make taxable sales, you must register for the GST and QST files. This registration is compulsory if:

  • You are not a small supplier;
  • You get orders (by mail or email) for products to send to Canada;
  • Your business operates in the rental of taxis or limousines.

Specifics of the QST:

Note that you must register for the QST regardless of the annual amount of your taxable sales. This remains valid whether or not you are registered for the GST file. You must register for the QST if:

  • You retail tobacco products;
  • You retail fuel;
  • You sell alcoholic beverages when you do not have a reunion permit;
  • You sell or lease new tires;
  • You sell or lease new or used road cars for at least 12 months.

JKB Accounting Services. peut vous donner davantage d’informations à ce sujet et vous assister quand à votre inscription à différents fichiers ou encore au calcul taxes québec. Pour davantage d’informations, Do not hesitate to contact the JKB Services team by calling us +1 514-561-4975 or complete the form on this page. 

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