GST/QST Filing Errors That Trigger Revenu Québec Penalties — How to Avoid the Most Common Mistakes

Introduction

GST/QST filing errors are one of the top reasons businesses in Quebec receive notices, reassessments, or penalties from Revenu Québec and the CRA. Even small mistakes — a missed ITC, a misapplied rate, or an incorrect reporting period — can lead to costly reviews or full audits. This guide explains the most common GST/QST filing errors, why they happen, how Revenu Québec enforces compliance, and the steps your business can take to avoid penalties.

Legal and Regulatory Framework

Under the Excise Tax Act (federal GST) and the Quebec Taxation Act (QSTA for QST), all registrants must:

• Charge GST/QST correctly based on the nature of the supply.

• Remit collected taxes on time.

• Claim input tax credits (ITCs) and input tax refunds (ITRs) only when properly documented.

• Maintain receipts, invoices, contracts, and proof of payment.

• File returns within statutory deadlines.

• Correct past-period errors through prescribed adjustment mechanisms.

Both CRA and Revenu Québec can impose:

• Interest under ETA s. 280 and QSTA s. 28.

• Penalties for late filing, failure to report, false statements, or gross negligence.

Key Court Decisions

Courts in Quebec and across Canada consistently rule that:

• ITCs/ITRs must be supported by proper invoices. Missing or incomplete invoices often result in denied credits.

• Businesses are responsible for ensuring suppliers charged the correct tax — errors by suppliers do not excuse incorrect filings.

• Repeated errors or failure to maintain adequate books can justify penalties.

• Refund claims may be denied if documentation is incomplete, even when the underlying purchase was legitimate.

These decisions reinforce the need for solid documentation and consistency in GST/QST reporting.

Why CRA and Revenu Québec Target These Issues

Authorities frequently audit businesses because:

• Industries with cash transactions often underreport sales.

• Businesses with recurring filing delays show “high-risk” behaviour.

• Large ITC/ITR claims or refund requests may appear suspicious.

• Input tax credits linked to personal or mixed-use expenses are commonly overstated.

• Incorrect GST/QST rates are frequently charged on services, rentals, and online sales.

Inconsistent filings from period to period also automatically trigger risk indicators.

Mackisen Strategy

Our approach provides complete protection and compliance:

1. Full GST/QST Compliance Review

We analyze your returns, invoices, receipts, and QuickBooks data to identify misapplied tax rates, missing ITC documentation, and reporting inconsistencies.

2. Pre-Audit Risk Assessment

We flag the issues that Revenu Québec would target and correct them before filing.

3. Documentation Standards

We implement CRA- and RQ-proof systems:

• Proper invoicing format

• Digital backup systems

• Monthly reconciliation templates

• Detailed ITC/ITR logs

4. Filing Accuracy Tools

We prepare or review your return to ensure:

• Correct tax codes

• Accurate allocation of business vs personal use

• Proper adjustments for prior-period corrections

• Matching revenues from bookkeeping, bank feeds, and tax returns

5. Audit Defense

If a review or audit occurs, we provide:

• Direct representation

• Submission of documents on your behalf

• Legal argumentation referencing the ETA and QSTA

• Full support until the matter is resolved

Real Client Experience

A Montreal entrepreneur faced a $14,000 reassessment for missing ITC documentation and inconsistent GST/QST filings. After our review:

• We corrected the filings,

• Reconstructed missing supporting documents,

• Provided a legal submission citing ETA invoice requirements,

• Reduced the assessment by over 70%.

This case highlights how minor filing errors can snowball — and how proper representation can reverse them.

Common Questions

1. What happens if I made a GST/QST error in a previous period?
You must file an amendment or adjust in the next return using the prescribed method.

2. Can Revenu Québec deny ITCs/ITRs even if the purchase is valid?
Yes. Missing information on invoices (supplier number, GST/QST numbers, description) is enough for denial.

3. How long should I keep GST/QST documents?
Six years from the end of the year to which they relate.

4. How do I fix incorrect GST/QST rates?
You must correct prior periods and charge correctly moving forward.

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.

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Avoid costly Revenu Québec penalties. Learn the most common GST/QST filing errors and how Mackisen CPA Montreal protects your business with full compliance, documentation systems, and audit-proof tax filings.