Food Delivery and Sales Tax: How GST/HST Applies to Takeout and Delivery Services — CPA Firm Near You, Montreal

Introduction

The rise of food delivery platforms has transformed the restaurant industry, but it has also created new GST/HST and QST compliance challenges. Whether you sell through Uber Eats, DoorDash, SkipTheDishes, your own website, or in-house delivery, each sales channel may require different tax treatment. Errors in applying sales tax can lead to reassessments, penalties, and lost input tax credits. This guide explains how GST/HST and QST apply to takeout, delivery, platform fees, and online ordering systems, and how a CPA firm near you in Montreal can help you avoid costly mistakes.

Legal and Regulatory Framework

Under the Excise Tax Act and Quebec’s Taxation Act, restaurants must charge GST/HST and QST on taxable food items sold through delivery or pickup. Zero-rated or exempt food items follow the same rules regardless of whether they are sold dine-in, takeout, or delivery. Delivery fees, service charges, and convenience charges are generally taxable unless clearly qualifying for an exemption. Delivery platforms are required to charge tax on their commissions, marketing fees, and service charges billed to restaurants. Restaurants must keep detailed invoices, platform statements, and daily summaries to ensure accurate reporting of collected tax. Failure to remit the correct amounts may result in assessments and interest.

Key Court Decisions

Tribunal cases confirm that delivery charges are taxable when connected to the sale of a taxable meal. Courts have also ruled that restaurants must maintain documentation that distinguishes platform commissions from taxable revenue. Several rulings reinforce that payment processors, online ordering services, and third-party platforms are considered suppliers of taxable services, and restaurants must claim eligible ITCs on their invoices. Businesses that failed to track online platform reports accurately faced reassessments due to discrepancies between declared revenue and actual platform payouts.

Why CRA and Revenu Québec Target Delivery Sales

Auditors know that delivery platforms generate multiple revenue streams, and errors are common when reconciling platform statements with restaurant sales. Differences between platform-reported sales and amounts recorded in bookkeeping systems raise red flags. CRA and Revenu Québec also examine whether delivery fees charged to customers include the correct tax, whether restaurants incorrectly treat convenience fees as exempt, and whether ITCs are missed on platform commissions. Cash-based delivery systems and manually reconciled orders increase audit risk.

Mackisen Strategy

At Mackisen CPA Montreal, we help restaurants build a complete tax-compliance system for delivery operations. This includes reconciling platform statements, verifying tax treatment for delivery and convenience fees, setting up proper GST/QST coding in POS systems, and ensuring all commissions and marketing fees generate recoverable ITCs. We also help restaurants automate reconciliations, reduce reporting errors, and prepare audit-ready documentation. If a CRA or Revenu Québec auditor reviews your delivery sales, we defend your calculations, provide reconciliations, and minimize reassessment risk.

Real Client Experience

A restaurant using multiple platforms had inconsistent GST/QST coding for delivery fees. Some fees were treated as exempt while others were taxed incorrectly, leading to a QST review. We analyzed platform statements, corrected the tax treatment, recalculated ITCs, and rebuilt their sales-tax reporting system. The restaurant avoided penalties and gained a streamlined, compliant delivery-tax workflow for all future operations.

Common Questions

Are delivery fees taxable?

Yes. Delivery, service, and convenience fees connected to the sale of a taxable meal are generally taxable under GST/HST and QST.

Do I need to remit tax on platform commissions?

No. The restaurant does not remit tax on commissions, but the commissions themselves include GST/QST that can be claimed as ITCs.

Are takeout and delivery taxed differently?

In most cases, no. Tax depends on the type of food sold, not whether the customer eats on-site or takes it to go.

How do I handle multiple delivery platforms?

You must reconcile each platform’s payouts, commissions, and tax amounts separately, and integrate them into your GST/QST returns.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses stay compliant while recovering the taxes they’re entitled to. Whether you’re filing your first GST/QST return or optimizing multi-year refunds, our expert team ensures precision, transparency, and protection from audit risk.