Taxation
The GST (Goods and Services Tax) is the federal sales tax, set at 5%. The QST (Quebec Sales Tax) is Quebec’s sales tax, set at 9.975%. Together, they add 14.975% to the price of most goods and services. In Quebec, Revenu Québec administers both taxes. Note: some products are zero-rated, such as staple foods (0% tax, but you can still claim input tax credits), while others are exempt, such as residential rent and most financial and health services (no tax, and no credits on these activities).
This is the number one mistake new entrepreneurs make: spending the tax they’ve collected. Here’s a concrete example: on a $1,000 sale, you charge $50 in GST and $99.75 in QST, for a total of $149.75 in taxes. That money isn’t yours, you’ll have to remit it to Revenu Québec. The lifesaving habit: Transfer the collected taxes to a separate account, like a piggy bank you don’t touch, so you’re never caught off guard on payment day. Bankeo connects you, for free, with a vetted accountant or CPA (Chartered Professional Accountant) who manages your registration, your tax payments (monthly, quarterly, or annually), and recovers your Input Tax Credits. We’re here for you.
Once you’ve registered, your GST/QST numbers must appear on your invoices: your customers need them to claim their own credits. To calculate your taxes in just a few seconds, use our GST/QST Calculator. Good to know: Some small businesses can simplify their tax payments using the “Quick Method,” a simplified calculation method that should be reviewed with an accountant. As with the Withholding Taxes, the tax collected is held on behalf of the government and is never considered income to be spent. The registration thresholds and refund rules are detailed by Revenu Québec. With the right guidance, this process becomes a simple routine: Bankeo connects you, at no cost, with an accountant who will set it up for you and provide ongoing support.
These are the two sales taxes you add to the price when you make a sale in Quebec: the GST (federal) at 5% and the QST (Quebec) at 9.975%, for a total of 14.975%. You collect these taxes from your customers and then remit them to the authorities.
As soon as your taxable sales reach $30,000 over four consecutive quarters (three months each). Below this threshold, registration is optional, but it already allows you to recover the tax paid on your business purchases (input tax credits). As long as you remain below this threshold, you have the official status of “small supplier.” Important note: The threshold is calculated over four consecutive calendar quarters, but if you exceed $30,000 in a single quarter, registration becomes mandatory immediately.
A zero-rated product is taxed at 0%: you do not charge tax (for example, basic food items), but you still recover your input tax credits, that is, the tax paid on your business purchases. An exempt product or service is also not taxed (for example, residential rent, most financial and health services), but you do not recover credits on these activities. The distinction may seem technical, but it directly affects your tax refunds.
Set aside the taxes you’ve collected and meet your filing deadlines. Bankeo connects you, for free, with a vetted accountant or CPA who will handle your registration, calculate your payments, and claim your input tax credits. We’re here to support you every step of the way.
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