VAT and VAT;

The VAT (Goods and Services Tax) is the federal sales tax, at 5%. The VAT is the Quebec rate, at 9.975%. Together, they add 14.975% to the price of most goods and services. In Quebec, the tax authorities administer both. Note that some products are tax-exempt, such as basic foodstuffs (0% tax, but you still receive input tax credits), while others are exempt, such as residential rents and most financial and health services (no tax, and no credits on these activities).

Brief

GST 5% (federal tax) + VAT 9.975% (Quebec tax) = 14.975% added to the price
Registration is mandatory once your taxable sales reach €30,000 over four quarters (a rolling year).
Below this threshold, you are considered a "small supplier": registration remains optional; if you exceed $30,000 in a single quarter, it becomes mandatory immediately.
These taxes are not income: you collect them for the State and you hand them over to it;
You recover the tax paid on your business purchases through input tax credits (ITC for VAT, ITC for VAT)
Once registered, your VAT numbers must appear on your invoices.

Why does this matter?

This is the number one mistake new entrepreneurs make: spending the tax we've collected. A concrete example: on a $1,000 sale, you charge $50 in GST and $99.75 in VAT, for a total of $149.75 in additional taxes. This money isn't yours; you have to remit it to Revenu Québec. The key to success: delete the collected taxes and put them into a separate account, like a piggy bank you never touch, so you're never caught off guard on remittance day. Bankeo connects you with a verified accountant or CPA (Chartered Professional Accountant) free of charge. They will manage your registration, your remittances (monthly, quarterly, or annual), and recover your input tax credits. We're here to support you.

Once registered, your VAT numbers must appear on your invoices: your customers need them to claim their own credits. To calculate your taxes in seconds, use our GST/QST calculator . Good to know: some small businesses can simplify their remittances with the quick method, a simplified calculation method that should be reviewed with an accountant.

Frequently asked questions

What exactly is VAT?

These are the two sales taxes you add to the price when you sell in Quebec: the GST (federal) at 5% and the VAT at 9.975%, for a total of 14.975%. You collect them from your customers and then remit them to the authorities.

When do I need to register?

As soon as your taxable sales reach $30,000 over four consecutive quarters (three months each). Below this threshold, registration is optional, but it still allows you to reclaim the tax paid on your business purchases (input credits). As long as you remain below this threshold, you officially have "small supplier" status. An important distinction: the threshold is assessed over four consecutive calendar quarters, but if you exceed $30,000 in a single quarter, registration becomes mandatory immediately.

What is the difference between tax-free and exempt?

A tax-free product is taxed at 0%: you don't charge tax (for example, basic food products), but you still receive input tax credits, meaning the tax paid on your business purchases. An exempt product or service is also not taxed (for example, residential rents, most financial and healthcare services), but you don't receive credits on these activities. The distinction may seem technical, but it directly affects your rebates.

How can I be sure I'm managing my taxes and rebates correctly?

Set aside the collected taxes and adhere to your remittance deadlines. Bankeo will connect you with a verified accountant or CPA free of charge to manage your registration, calculate your remittances, and recover your input credits. We're here to support you every step of the way.