CAN I GET GST/QST BACK IF MY BUSINESS HAS NO SALES

Many new businesses, startups, freelancers, and contractors incur significant expenses before earning their first dollar of revenue. This often raises an important question:
Can I get a GST/QST refund even if I had no sales this period?
The short answer: YES, in many cases, you can.

Quebec’s tax system allows businesses to recover GST (through ITCs) and QST (through ITRs) on eligible expenses, even when sales are zero. However, strict documentation and eligibility rules apply, and Revenue Québec often verifies refund claims when no revenue is reported.

This guide explains when and how businesses can receive refunds with no sales, and what to expect during the process.

LEGAL AND REGULATORY FRAMEWORK

Refunds without sales are governed by:
• the Excise Tax Act (GST input tax credits)
• the Quebec Taxation Act (QST input tax refunds)

These laws allow businesses to claim credits if:
• they are properly registered for GST/QST
• expenses relate to commercial (taxable) activity, even if revenue has not started
• documentation is complete and valid
• tax was actually paid on purchases

The absence of sales does not prevent refund eligibility.

KEY COURT DECISIONS

Courts have ruled that:
• ITCs/ITRs can be claimed for legitimate commercial activity before revenue begins
• taxpayers must prove the intention to operate a taxable business
• missing receipts justify denial
• business plans, contracts, and startup documents strengthen refund claims
• refund verification is reasonable when no sales exist
• zero revenue does not mean the business is “inactive”

Courts consistently emphasize that documentation and commercial intent are key.

CAN YOU GET A GST/QST REFUND WHEN YOU HAVE NO SALES?

Yes, in these scenarios:

1. STARTUP PHASE BEFORE FIRST SALE

Many businesses spend money on:
• equipment
• software
• marketing
• incorporation fees
• rent
• product development
• website creation
• inventory purchases

All these expenses may generate ITCs/ITRs even before revenue begins, as long as the activity is intended to be taxable.

2. BUILDING INVENTORY OR INVESTING IN GROWTH

If you:
• purchased goods for resale
• upgraded tools
• invested in machinery
• bought raw materials

You may receive large GST/QST refunds despite having no sales for the period.

3. SEASONAL BUSINESSES

Seasonal businesses often have expense periods without revenue. Refunds still apply as long as expenses relate to commercial activity.

4. CONTRACTORS BETWEEN PROJECTS

Consultants, contractors, and freelancers may have months with zero sales but ongoing expenses. Refund claims remain valid.

5. BUSINESSES WITH TEMPORARY CLOSURES

If the business temporarily pauses sales but continues paying expenses (rent, utilities, software), refunds may still apply.

6. E-COMMERCE STORES WITH SETUP COSTS

Online sellers often pay for:
• website development
• platform fees
• initial inventory
• branding costs

These are refundable via ITCs/ITRs, even before launch.

WHEN REFUNDS ARE NOT ALLOWED WITH ZERO SALES

Refunds cannot be claimed when:
• the business is exempt from GST/QST (e.g., certain health or education services)
• the expense is personal or mixed-use without proper allocation
• the supplier did not charge GST/QST
• invoices are missing or invalid
• the business has no intention of earning taxable revenue

You must prove intent to operate a taxable business.

EXPECT A REFUND VERIFICATION WHEN SALES ARE ZERO

Revenue Québec frequently selects zero-sales refunds for review. They may request:
• invoices and receipts
• proof of payment
• business plans
• contracts or client correspondence
• incorporation documents
• marketing plans
• website screenshots or development invoices
• startup documentation

This is normal and does not mean there is a problem.

HOW TO STRENGTHEN A NO-SALES REFUND CLAIM

• keep all receipts
• ensure invoices show supplier GST/QST numbers
• maintain a clear business plan
• keep proof of commercial intention
• reconcile bookkeeping properly
• update accounting software tax codes
• respond quickly to verification letters

HOW TO FILE A ZERO-SALES REFUND RETURN

1. File your FPZ-500-V normally

2. Enter GST/QST paid on eligible expenses

3. Report $0 taxable sales (if applicable)

4. Maintain complete documentation

5. Monitor Mon Dossier for refund status

MACKISEN STRATEGY

Mackisen CPA helps businesses maximize refunds — even with zero sales. We:
• review expenses for eligibility
• organize documentation
• prepare FPZ-500-V filings
• respond to Revenue Québec verification requests
• reconstruct startup activity to prove commercial intent
• ensure refunds are processed smoothly

Our expertise protects your refund and prevents unnecessary delays.

REAL CLIENT EXPERIENCE

A startup incurred $18,000 of expenses before launch. Mackisen filed GST/QST returns and secured a full refund.

A contractor had no projects for two months but kept paying expenses. Mackisen handled the review and the refund was approved.

An e-commerce business invested heavily in website design before launch. Mackisen helped justify commercial intent and secure ITCs/ITRs.

COMMON QUESTIONS

Do I need sales to file GST/QST?
No, you must file even if sales are zero.

Can I still get input credits without sales?
Yes, if expenses relate to taxable activities.

Will Revenue Québec audit me for a zero-sales refund?
Often they will verify, but it is routine.

Do I need to prove business intention?
Yes, documentation helps.

WHY MACKISEN

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses claim GST/QST refunds correctly, even without sales. We ensure your filings are complete, compliant, and fully supported to avoid delays or adjustments.