GST/QST Rules for Professional Services in Quebec: Lawyers, Accountants, Architects, Engineers, and Consultants

Introduction

Professional service providers in Quebec — including lawyers, accountants, architects, engineers, consultants, actuaries, and medical professionals (where taxable) — face unique GST/QST obligations.
Because these professions bill for time, expertise, and specialized services rather than goods, Revenu Québec closely audits how GST/QST is charged, reported, and supported by documentation.
This guide explains how GST/QST applies to professional services, which services are taxable or exempt, how to issue compliant invoices, and how to protect your business from penalties.

Legal and Regulatory Framework

Under the Excise Tax Act (GST) and Quebec Taxation Act (QSTA):

• Most professional services supplied in Quebec are taxable, except those explicitly exempt (e.g., certain healthcare or financial services).

• GST at 5% and QST at 9.975% must be charged on:

  • Legal services

  • Accounting services

  • Engineering and architectural services

  • Consulting and advisory services

  • Actuarial services

  • Business coaching and training

• Invoices must contain all mandatory elements, including GST/QST numbers.

• ITCs/ITRs may be claimed only on eligible business expenses used to make taxable supplies.

Authorities enforce:

• ETA s.165/QSTA s.16 — tax on taxable supplies

• ETA s.221/QSTA s.22 — obligation to collect

• ETA s.169(4)/QSTA s.39 — documentation for credits

• ETA s.286/QSTA s.24 — record-keeping rules

Key Court Decisions

Courts have ruled that:

• Even high-level professional services are subject to GST/QST unless explicitly exempted by statute.

• Professionals cannot rely on “verbal agreements” to avoid charging tax.

• Missing GST/QST numbers on invoices results in denied ITCs/ITRs for clients.

• Services supplied to non-residents may be zero-rated, but only if the client is outside Canada and the service is not related to Canadian real property or activities.

• Mixed taxable/exempt practices (e.g., medical + aesthetic services) must prorate expenses accurately.

These decisions reinforce the need for precise invoicing and clear supply classification.

Why CRA and Revenu Québec Target These Issues

Professional service firms attract audits because:

• Many professionals forget to charge GST/QST on disbursements or additional fees.

• Some services (e.g., financial advising, certain medical services) are exempt, creating classification errors.

• International clients complicate place-of-supply rules.

• Bookkeeping systems often misclassify GST/QST codes for expenses.

• Large ITC/ITR claims for software, rent, and subcontractors create red flags.

• Professionals who operate through corporations often mix personal and business expenses.

High-risk fields: law, engineering, consulting, design, IT, architecture, business coaching, and specialized technical services.

Mackisen Strategy

We help professionals stay fully GST/QST compliant while maximizing ITC/ITR recovery.

1. Service Classification

We determine:

• Whether services are taxable or exempt

• Whether zero-rating applies for non-resident clients

• Whether bundled services must be separated

2. Invoice & Contract Review

We ensure:

• GST/QST numbers appear correctly

• Additional fees and disbursements are taxed properly

• Retainers and deposits are treated according to GST/QST rules

• Place-of-supply rules are applied correctly for foreign clients

3. ITC/ITR Optimization

We review:

• Software subscriptions

• Office rent and utilities

• Professional dues and continuing education

• Equipment and furniture

• Subcontractor invoices

4. Bookkeeping Accuracy

We implement:

• Proper chart-of-accounts tax coding

• Monthly reconciliation

• Audit-ready documentation

• Systems to separate exempt vs taxable expense categories

5. Audit Defence

We prepare:

• Documentation packages

• Supply classification reports

• Legal arguments referencing ETA/QSTA

• Representation until full resolution

Real Client Experience

A Montreal architect billed clients in the U.S. but treated all those invoices as zero-rated without verifying whether services related to Canadian buildings.
Revenu Québec reassessed over $14,000 in GST/QST.
Mackisen reviewed the engagement letters, classified each service correctly, and demonstrated that most services related to foreign developments — reducing the assessment by more than half.

This case shows how cross-border professional services require precise analysis.

Common Questions

1. Are all professional services taxable?
Almost all — except services explicitly exempt under the law.

2. Are services to U.S. clients zero-rated?
Yes, if the service is supplied to a non-resident and does not relate to Canadian real property or activity.

3. Can I charge GST/QST on disbursements?
Yes — in most cases. Disbursements must be reviewed carefully to determine tax treatment.

4. Can professionals claim ITCs/ITRs on all business expenses?
Only on those related to taxable activities. Mixed practices require proration.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps professional service firms stay compliant while recovering the taxes they’re entitled to. Whether you’re advising clients, drafting contracts, or filing GST/QST returns, our expert team ensures precision, transparency, and protection from audit risk.

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GST/QST rules for professional services in Quebec — learn which services are taxable, how to bill correctly, and how to claim ITCs/ITRs while avoiding costly Revenu Québec audits.