GST/QST Taxes
Accountant for retail businesses in Quebec: Taxes, inventory, and actual costs
July 23, 2026
At a Glance. A retail business in Quebec collects the 5% GST and the 9.975% QST on most of its sales, totaling 14.975% at the register, and remits both taxes to Revenu Québec. Inventory must be counted and valued at the end of each fiscal year, as it determines the cost of goods sold and, therefore, taxable income. In terms of fees, the median across all sectors is approximately $3,000 per year, and most engagements range from $500 to $6,000; for a retailer, a comprehensive package typically ranges from $1,500 to $4,500 per year, According to the Bankeo Fee Barometer. Based on actual fees from 1,248 assignments completed through Bankeo (2024-2026), out of more than 15,000 requests received.
Running a retail business in Quebec means processing hundreds of transactions per week, managing inventory that ties up your capital, and collecting two sales taxes on almost everything that leaves the store. A retailer’s accounting is therefore very different from that of a consultant who issues four invoices a month: volume, cash register transactions, and inventory change everything. This 2026 guide covers what’s unique to retail in Quebec: GST and QST at the register, zero-rated products, inventory management approved by the CRA and Revenu Québec, your annual obligations, and the actual fees for the retail sector according to the Bankeo Fee Barometer. It complements our GST/QST Guide for Businesses in Quebec.
Four realities of the retail industry complicate accounting and explain why an accountant who understands your industry can save you time and money.
In Quebec, most retail goods are subject to two taxes: the 5% federal GST and the 9.975% QST, for a total of 14.975% added to the listed price. Revenu Québec administers both tax systems for businesses based in Quebec: a single registration, a single combined tax return. However, certain common retail products are zero-rated, that is, taxed at 0%, and not always exempt from both taxes at the same time. This is where cash register programming errors can be costly.
| Products Sold in-Store | 5% GST | QST 9.975% |
|---|---|---|
| Clothing, shoes, accessories, home goods | Taxable | Taxable |
| Basic Groceries (bread, milk, fruits, vegetables) | Zero-rated (0%) | Zero-rated (0%) |
| Soft drinks, snacks, and candy | Taxable | Taxable |
| Printed Books with ISBNs | Taxable | Zero-rated (0%) |
| Baby Diapers and Breastfeeding Supplies | Taxable | Zero-rated (0%) |
| Gift Cards at the Point of Sale | No tax | No taxes (taxes are collected when the customer uses the service) |
Two key practices ensure your compliance. First, set up each tax code correctly in the point-of-sale system as soon as you add a product: a recurring error across thousands of transactions can quickly lead to a tax adjustment. Second, handle returns properly: when a customer returns an item, you refund the price including taxes, and your tax returns must reflect this adjustment. At the same time, you can recover the GST and QST paid on your business purchases (inventory, commercial rent, equipment) through input tax credits and input tax rebates, which reduces the net amount you owe.
The taxes you collect at the register aren’t revenue, they’re money held in trust for Revenu Québec. Set it aside as you go, ideally in a separate account, so that the quarterly remittance never becomes a cash flow shock. And if you sell online to customers outside Quebec, the tax is calculated based on the destination province: a package shipped to Ontario is charged the HST of that province, not the QST.
The cost of goods sold is calculated as follows: beginning inventory plus purchases for the fiscal year, minus ending inventory. In other words, the value of your inventory at the end of the fiscal year directly affects the calculation of your taxable income. An overvalued inventory artificially inflates profit and the tax liability; an undervalued inventory raises red flags during an audit. This is the most sensitive accounting item in the retail industry.
For tax purposes, the CRA accepts that inventory be valued at the lower of cost and fair market value, item by item, or entirely at fair market value. To determine cost, the accepted methods are specific identification, weighted-average cost, and first-in, first-out (FIFO). The last-in, first-out (LIFO) method is not accepted in Canada. The method chosen must then be applied consistently from one tax year to the next: changing it without a valid reason may raise questions.
Point-of-sale software provides a theoretical inventory; only a physical count reveals the actual inventory. At least once a year, on the fiscal year-end date, count your inventory, value it according to your method, and document everything (dated count sheets, signed forms, photos if necessary). The difference between the book inventory and the actual count is your shrinkage: shoplifting, breakage, receiving errors, or cash register errors.
Documented markdowns reduce the value of closing inventory, which increases the cost of goods sold and consequently decreases taxable income. The same logic applies to obsolete or unsellable inventory: if its fair market value falls below its cost, the lower-of-cost-or-market rule allows you to write it down in the fiscal year in which the impairment occurs, provided you can substantiate it (clearance sales, documented disposal). A good accountant will set up this tracking system with you: markdown categories at the point of sale, a monthly variance report, and a defensible year-end allowance.
Beyond the register and inventory, the tax calendar for a Quebec retail business can be broken down into four main categories.
The good news: a well-organized monthly bookkeeping system (reconciled cash register, broken-down taxes, tracked inventory) supports everything else without any duplicate work. See what it really costs to Monthly Bookkeeping in Quebec.
The benchmark is the Bankeo Fee Barometer: The median across all sectors is approximately $3,000 per year, and most assignments range from $500 to $6,000. Based on actual fees from 1,248 engagements completed through Bankeo (2024-2026), out of more than 15,000 requests received. The retail sector generally falls above the median because transaction volume, cash reconciliation, and inventory tracking require more hours than a typical professional services engagement. Here are the ranges observed in the retail segment.
| Service (retail segment) | Observed range |
|---|---|
| Monthly bookkeeping, with cash and inventory reconciled | $200 to $500 per month |
| GST/QST Filings | Most commonly included in bookkeeping |
| T2 and CO-17 Returns for Incorporated Companies | $1,200 to $2,500 per year |
| Payroll and source deductions for a Small Team | $600 to $1,500 per year |
| Most Popular Comprehensive Annual Package | $1,500 to $4,500 per year |
A high-volume convenience store with payroll can reach the top of the general range, around $6,000 per year, while a small shop without employees that keeps its books in order stays near the bottom. The factor that most affects the bill is the condition of your data: a point-of-sale system that’s well-integrated with accounting software reduces the number of hours billed. Also, keep in mind the Bankeo model: the matching service is completely free for you, and the fees listed here are those of the accountants, not Bankeo’s fees.
Not all accountants are created equal when it comes to retailers. Look for concrete evidence of experience in your specific industry.
Before signing, ask the right questions: our list of Questions to Ask an Accountant Before Hiring Them provides you with a ready-to-use template. You can also browse the Vetted accountants in the Bankeo network to compare profiles from professionals with retail experience.
Bankeo connects you for free with vetted accountants from its network of over 1,500 partners, including several CPAs registered with the Ordre des CPA du Québec. Cash, taxes, inventory: we’ll find the right match for your business, often within 48 hours, with no obligation, and we’ll support you for as long as you need.
Find my accountantRegistration becomes mandatory when your taxable sales exceed $30,000 over four consecutive calendar quarters. A retailer almost always reaches this threshold quickly: in practice, it’s best to register with Revenu Québec before making your first sale so you can claim a refund right from the start for taxes paid on initial inventory, store fixtures, and equipment.
Basic grocery items (bread, milk, fruit, vegetables) are zero-rated for both the GST and the QST. Certain products are zero-rated for the QST but remain subject to the 5% GST: printed books with an ISBN, baby diapers, and breastfeeding supplies. Soft drinks, snacks, and candy remain subject to both taxes. The tax code settings in your point-of-sale system must reflect these distinctions.
The CRA accepts valuation at the lower of cost and fair market value, item by item, or entirely at fair market value. To determine cost: specific identification, weighted-average cost, or first-in, first-out. The last-in, first-out method is not accepted in Canada, and the chosen method must be applied consistently from one fiscal year to the next.
According to the Bankeo Fee Barometer, the median rate across all sectors is approximately $3,000 per year, and most engagements range from $500 to $6,000. For a retailer, a comprehensive package (bookkeeping, taxes, filings) typically ranges from $1,500 to $4,500 per year, with transaction volume and inventory pushing the bill above the median. Based on actual fees from 1,248 engagements completed through Bankeo (2024-2026), out of more than 15,000 requests received.
No GST/QST is collected when you sell the gift card: it’s a prepaid payment method, not a sale of goods. Taxes apply when the customer uses the card to purchase a taxable item, based on the rates in effect at that time. Your point-of-sale system must therefore distinguish between the sale of gift cards and their use.
Document discrepancies between the point-of-sale book inventory and the physical count: this inventory write-down reduces the value of the ending inventory, increases the cost of goods sold, and consequently decreases taxable income. Obsolete inventory whose fair market value falls below cost may be written down using the lower-of-cost-or-market rule, provided the loss is supported by documentation (clearance sales, documented disposal).
General information provided for informational purposes only, based on known 2026 tax rules. It is not a substitute for the advice of a Chartered Professional Accountant (CPA): always consult a professional regarding your specific situation.
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