Calculating GST and QST – Collecting Taxes and Claiming Credits

Calculating GST/QST for your small business involves two sides: the tax you collect from customers, and the tax you pay on business purchases. GST is charged at 5% and QST at 9.975% on most taxable sales in Quebec. (Since 2013, QST is calculated on the sale price excluding GST, unlike earlier years when QST was charged on top of GST. This means you apply 5% GST to the price, then 9.975% QST on that same price, not on a GST-included total.)

During each reporting period, you must tally all GST and QST collected on your sales, as well as the GST and QST you paid on business inputs that qualify for credits. The taxes paid on purchases can be recovered through input tax credits (ITCs) for GST and input tax refunds (ITRs) for QST. (In French, input tax credits are called crédits de taxe sur les intrants (CTI).) For example, if you bought office supplies for your business and paid $50 GST and $100 QST, those amounts can typically be claimed back as ITC/ITR to offset the taxes you collected on sales.

Your net tax to remit = (GST + QST collected) – (GST credits + QST refunds). If the result is positive, you owe that amount to Revenu Québec; if negative, you’re entitled to a refund. Proper bookkeeping is essential here – maintain clear records of taxes collected and paid, and keep all invoices/receipts to support your ITC and ITR claims. Forgetting to claim eligible ITCs is a common mistake that means you might pay more tax than necessary, so be thorough in tracking your expenses.

Tip: Small businesses may simplify this calculation by using the Quick Method of accounting for GST/QST if eligible. The Quick Method lets you remit a flat percentage of sales instead of tracking all ITCs, which can reduce paperwork This method isn’t for everyone, but it’s worth discussing with a CPA if you find the regular method onerous.