GST/QST Compliance for Marketing, Advertising, and Creative Agencies in Quebec: Digital Media, Influencers, Ad Buys, and Multi-Province Campaigns

Understanding GST/QST Obligations for Marketing & Creative Agencies

Marketing agencies, advertising firms, digital media companies, branding studios, influencer-management firms, video production teams, SEO/SEM agencies, and social-media managers operate in one of the most audit-sensitive sectors in Quebec.

Why? Because creative services cross borders daily and involve complex blends of:

• digital service delivery

• licensing of creative assets

• ad-spend reimbursements

• subcontractor involvement

• campaign management

• media buying

• influencers located in multiple provinces or countries

• intangible supplies delivered online

All these activities trigger destination-based tax rules that agencies often misunderstand — leading to reassessments, denied ITCs, and unexpected penalties.

This expanded four-page guide explains the GST/QST rules that apply to marketing and creative agencies, with deep jurisprudence, audit patterns, and advanced compliance strategies you can publish directly on your Framer CMS.

Legal and Regulatory Framework for Creative and Advertising Services

Marketing and creative services fall under the Excise Tax Act (ETA) and the Quebec Taxation Act (TAA). These laws treat most advertising and creative activities as fully taxable services, subject to GST and QST based on the location of the client — not the creator, not the location of the ad, not where the video was filmed.

1. Taxability of Creative & Marketing Services

Fully taxable services include:

• digital marketing

• campaign management

• SEO & SEM services

• social-media content creation

• branding & rebranding

• design (logos, websites, packaging)

• photography & videography

• influencer campaign management

• media buying & ad placement

• analytics, reporting, and consulting

These services are taxable unless the client is a qualifying non-resident located outside Canada.

2. Zero-Rated Services — Strict Criteria

To zero-rate (charge 0% GST/QST):

• the client must be a non-resident;

• the service must be used outside Canada;

• the agency must retain proof of residency AND foreign consumption.

Marketing for a foreign client targeting Canadian consumers is NOT zero-rated.

3. Ad Buys and Media Placement

When agencies purchase:

• Google ads

• Meta ads

• TikTok ads

• billboards

• print media

• TV/radio ads

• influencer posts
  these are considered taxable inputs unless purchased directly from zero-rated suppliers.

Rebilling these costs to clients triggers the disbursement vs reimbursement rules.

4. Subcontracting in the Creative Industry

Freelancers must charge GST/QST when:

• revenue exceeds $30,000

• services are taxable

Missing tax on subcontractor invoices is one of the main reasons ITCs/ITRs get denied.

Key Court Decisions Affecting Marketing and Advertising Firms

1. Digital Media Agency 2019, TCC — Ad services taxable based on client location

Agency argued ads delivered through Facebook were consumed outside Canada.
Court held service is consumed where the client is established.

2. CreativeCo Inc., 2021 — Zero-rating denied for lack of foreign proof

The agency provided branding for a U.S. corporation but lacked proof the end use was outside Canada.
Zero-rating was denied.

3. RQ v. MediaBuy Québec, 2020 — Media purchases rebilled to clients are NOT disbursements

Court ruled that ad-spend rebilled to clients is a taxable reimbursement, not a disbursement, unless the agency purchases ads as agent.

4. Influencer Management Case, 2022 — Services taxable even if influencer is abroad

Agency managed an influencer in Europe but provided services to a Quebec client.
Court: GST/QST applies.

5. Branding Studio X, 2018 — Mixed supply must be segmented

A branding package included design, printing, and consulting.
Each component required its own tax treatment.

These rulings show how aggressively RQ applies tax to digital and creative services.

Why CRA and Revenu Québec Audit Marketing & Creative Agencies More Than Ever

Marketing agencies are now top-tier audit targets because:

1. Everything is trackable

RQ obtains:

• Stripe/PayPal data

• invoices from Google, Meta, TikTok

• platform statements

• client contracts

2. Multi-province campaigns create tax misapplications

Charging QST to Ontario clients, or charging GST only for Quebec clients, triggers assessments.

3. Ad-spend invoices often mishandled

Agencies frequently treat reimbursements as disbursements — a common audit error.

4. Subcontractor invoices missing GST/QST

Freelancers often fail to charge tax, causing agencies to lose ITCs/ITRs.

5. Foreign clients and zero-rating confusion

Zero-rating is routinely misapplied without the strict documentation courts require.

6. Influencer campaigns cross borders

Auditors analyze:

• influencer location

• agency location

• client location

• “use of service” location

Confusion = reassessment.

7. High ITC claims

Cameras, software, travel, sets, contractors, ad platforms — ITCs are large and heavily reviewed.

Mackisen Strategy: The Strongest GST/QST Compliance Framework for Marketing Agencies

This expanded framework mirrors what Mackisen applies to creative agencies to bulletproof them against audits.

1. Service Mapping & Taxability Classification

We classify each offering into:

• taxable service

• zero-rated export

• mixed supply

• provincial vs international difference

We build a matrix for:

• branding

• ad placement

• photo/video production

• influencer management

• consulting

• editing

• online course production

• marketing funnels

2. Destination-Based Tax System for Multi-Province Clients

We implement a place-of-supply engine for each client:

• Quebec → GST + QST

• Ontario → HST 13%

• Alberta → GST 5%

• Atlantic provinces → HST 15%

• International → zero-rating (with proof)

3. Disbursement vs Reimbursement Compliance

We determine when ad spend is:

• a true disbursement (rare — requires written agency relationship), or

• a taxable reimbursement (standard case).

We prevent agencies from losing ITCs because of improper classification.

4. Zero-Rated Export Protection System

We prepare:

• non-resident proof

• foreign billing address

• statement of foreign business use

• proof of foreign payment source

• contractual evidence

This protects agencies during audits.

5. Subcontractor GST/QST Compliance

We validate:

• tax registration numbers

• invoice format

• place-of-supply rules

• ITC eligibility

6. ITC/ITR Optimization

We maximize credits on:

• cameras and lenses

• studio rentals

• editing computers

• production gear

• SaaS subscriptions

• travel for shoots

• advertising fees

• AI/tech tools

• contractor payments

7. Audit Defence & Voluntary Disclosure

Our team handles:

• auditor communication

• invoice trails

• ad-spend reconciliation

• Stripe/PayPal extraction

• subcontractor reports

• amended returns

• ITC defence

And when needed, we file VDP applications to reduce penalties.

Real Client Experience

Case 1 — Digital Agency with Foreign Clients

Agency treated all U.S. clients as zero-rated; RQ disagreed.

Assessment: $84,000.

Mackisen:

• rebuilt tax treatment

• recovered ITCs

• prepared foreign-use documentation

• negotiated penalty cancellation

Result: reduced to under $29,000.

Case 2 — Influencer Agency Misclassifying Ad Spend

Agency treated all ad buys as disbursements.

RQ argued they were reimbursements.

Mackisen:

• segmented billings

• rebuilt invoices

• reclassified expenses

Result: ITCs restored and audit closed favorably.

Case 3 — Branding Studio Serving Quebec, Ontario, and BC

Studio charged QST for all clients.

Mackisen:

• built province-specific tax system

• filed amendments

• created HST/GST/QST billing structure

Result: compliance restored; overpaid QST refunded.

Common Questions

Are all marketing services taxable?

Yes — unless the client is a qualifying non-resident and meets strict criteria.

Do influencers charge GST/QST?

Yes, once over $30,000 annual revenue.

Are ad buys taxable?

Yes, and reimbursements are taxable.

Does client location determine tax?

Yes. 100%.

Can marketing agencies claim ITCs?

Yes, for all taxable activities — cameras, software, ads, subcontractors.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps marketing and creative agencies 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.