E-COMMERCE SALES TAX CHECKLIST: GST/QST STEPS FOR ONLINE SELLERS

E-commerce businesses face unique challenges when it comes to GST and QST compliance. Whether you sell through Shopify, Amazon, Etsy, WooCommerce, or your own platform, Quebec’s sales tax rules apply as soon as you sell taxable goods or services to customers in the province. Many online sellers unknowingly mischarge tax, under-collect QST, or misapply place-of-supply rules — exposing themselves to penalties, refund delays, or even Revenu Québec audits. This e-commerce sales tax checklist helps online sellers correctly set up, track, and file GST/QST for smooth and compliant digital operations.

A structured approach to sales tax ensures accurate pricing, clean financials, and full compliance with federal and provincial laws.

LEGAL AND REGULATORY FRAMEWORK

E-commerce GST and QST obligations are governed by the:
• Excise Tax Act (GST)
• Quebec Taxation Act (QST)

Key requirements include:
• registering for GST/QST once you exceed the $30,000 small supplier threshold
• charging GST and QST to Quebec customers
• charging GST/HST to customers in other provinces according to place-of-supply rules
• charging no tax or zero-rated tax on qualifying international sales
• keeping detailed sales and expense records for at least six years

For digital products, SaaS, online subscriptions, and foreign sellers, Quebec’s “specified registration system” may apply.

KEY COURT DECISIONS

Courts have confirmed that e-commerce sellers must comply with place-of-supply rules and cannot rely on platform defaults as a defense. Judges have upheld reassessments in cases where:
• sellers charged GST but not QST
• incorrect HST amounts were applied
• online sellers lacked documentation for zero-rated exports
• digital suppliers failed to register despite significant Quebec sales

These rulings show that online sellers must actively configure and monitor their tax systems.

WHY E-COMMERCE BUSINESSES GET AUDITED

Revenue Québec closely monitors online sellers because digital sales often generate:
• incorrect tax rates
• missing QST on Quebec orders
• inconsistent sales reports across platforms
• casual bookkeeping
• refund claims without documentation
• large numbers of small transactions

Cross-border and interprovincial transactions are especially prone to mistakes.

E-COMMERCE SALES TAX CHECKLIST: GST/QST STEPS FOR ONLINE SELLERS

Follow this complete checklist to stay compliant across platforms.

1. Confirm your GST/QST registration requirements
   If your worldwide taxable revenue exceeds $30,000 in four consecutive quarters — or a single quarter — registration is mandatory. Voluntary registration is recommended for most e-commerce businesses.

2. Configure your online platform tax settings
   Set up your platform (Shopify, Etsy, Amazon, WooCommerce, etc.) to correctly charge:
   • GST + QST for Quebec customers
   • GST/HST depending on other provinces
   • no tax or zero-rated tax for qualifying international orders
   Ensure shipping, digital items, and discounts are taxed properly.

3. Verify platform tax collection accuracy
   Some platforms do not automatically collect QST unless configured manually. Run test invoices to confirm correctness before launching sales.

4. Set up proper invoicing
   Invoices (digital or PDF) must include:
   • your GST and QST numbers
   • tax rates and amounts
   • customer details
   • clear product descriptions
   • invoice date and number
   Missing or non-compliant invoices cause denial of input tax credits.

5. Track revenue by province
   Create reports that show sales by province. This ensures you collect the correct tax depending on customer location.

6. Separate taxable, zero-rated, and exempt sales
   E-commerce businesses often sell:
   • taxable goods
   • digital products
   • zero-rated exports
   • exempt items (rare but possible)
   Correct categorization ensures accurate filing.

7. Track all platform fees and expenses
   Expenses from platforms often include GST/HST but not QST (e.g., Shopify fees). Collect invoices for:
   • subscription fees
   • transaction fees
   • app add-ons
   • advertising fees
   • fulfillment services

These may generate input tax credits.

8. Reconcile all sales channels
   If you use multiple platforms (Shopify + Amazon + manual invoices), consolidate and reconcile all sales into a single bookkeeping system.

9. Reconcile platform payouts with bank deposits
   Match deposits from Stripe, PayPal, Amazon Payments, etc., to your bookkeeping records. Fees deducted must be recorded properly to calculate accurate GST/QST.

10. Track input tax credits (ITCs/ITRs)
    Ensure all business expenses are documented and categorized with supporting invoices.

11. Prepare for periodic GST/QST returns
    Use your reconciled reports to file your FPZ-500-V return accurately. Ensure documentation supports every number filed.

12. Maintain audit-ready documentation
    E-commerce businesses should keep:
    • monthly sales reports
    • platform tax summaries
    • receipts for advertising and platform fees
    • bank reconciliation
    • expense invoices
    • ITC/ITR schedules
    Auditors often review online sellers due to digital transaction volume.

MACKISEN STRATEGY

Mackisen CPA helps e-commerce businesses configure GST/QST on platforms, reconcile multichannel sales, and prepare audit-ready filings. We set up proper accounting systems, correct tax coding issues, and ensure compliance with interprovincial and international tax rules. Our team also prepares GST/QST returns, handles refund verifications, and supports online sellers during Revenu Québec reviews.

REAL CLIENT EXPERIENCE

A Shopify merchant charged GST but not QST for months due to incorrect settings. Mackisen corrected the configuration, recalculated taxes, and filed adjustments to fix the issue.

An Amazon seller experienced refund delays because sales were not reconciled with payouts. Mackisen created a structured reporting system and resolved discrepancies.

A subscription-based SaaS business incorrectly treated digital services as exempt. Mackisen updated tax codes and prevented a large reassessment.

COMMON QUESTIONS

Do all online sellers need to charge QST
If you sell taxable goods or services to Quebec customers and meet registration requirements, yes.

Can Shopify automatically handle QST
Only if configured. Manual setup is often required.

Do platform fees count for ITCs
Yes. Many digital expenses qualify for input tax credits.

What if I sell in multiple provinces
Apply place-of-supply rules. You may need to charge HST or GST depending on customer location.

Are digital products taxable
Yes, unless they meet specific zero-rated criteria.

WHY MACKISEN

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps online sellers manage GST/QST obligations accurately across all platforms. Our expertise ensures your digital business remains compliant and audit-ready while scaling across Canada and beyond.