GST/QST Compliance for E-Commerce Sellers in Quebec: Shopify, Amazon, Marketplace Rules, and ITC/ITR Recovery

Introduction

E-commerce sellers — Shopify stores, Amazon FBA merchants, dropshippers, social-media sellers, and online subscription businesses — face unique GST/QST challenges in Quebec. With thousands of micro-transactions, marketplace commissions, international suppliers, imported goods, and multi-province customers, many sellers accidentally underreport sales, claim incorrect ITCs/ITRs, or fail to register on time.

Revenu Québec audits this sector aggressively because platform data is easy to verify. This guide explains GST/QST rules for e-commerce sellers, how marketplace platforms affect your obligations, and how to stay fully compliant while maximizing allowable tax credits.

Legal and Regulatory Framework

E-commerce GST/QST rules fall under the Excise Tax Act (ETA) and the Quebec Taxation Act (TAA).

Mandatory Registration

If worldwide taxable sales exceed $30,000, sellers must register for:

• GST (5%)

• QST (9.975%)

Online-only sellers are treated the same as physical retailers.

Taxability of E-Commerce Sales

Most digital and physical products sold to Quebec consumers are taxable unless zero-rated, including:

• books and certain food items (zero-rated)

• vitamins (taxable)

• apparel (taxable)

• digital services (taxable under specific rules)

Destination-Based Tax Rules

Tax depends on customer location:

• Quebec customer → GST + QST

• Other province → GST/HST based on province

• Outside Canada → generally zero-rated if exported properly

Accurate shipping address records are required.

Marketplace Rules (Shopify, Amazon, Etsy, eBay)

Shopify

Shopify does not collect GST/QST by default.
The seller is responsible for:

• enabling tax settings

• collecting GST/QST

• remitting taxes

• tracking refunds

• handling shipments to other provinces

Mistakes in Shopify settings are one of the most common audit issues.

Amazon (FBA/FBM)

Amazon may collect GST/HST in other provinces depending on marketplace facilitator rules, but not QST.
You must:

• collect QST on Quebec sales

• reconcile Amazon payouts

• adjust for Amazon commissions (taxable)

• track FBA import GST for ITC purposes

Etsy & eBay

These platforms collect marketplace taxes for some jurisdictions, but sellers must still:

• track and remit QST

• claim ITCs on platform fees (which are taxable)

Marketplace facilitator rules continue to evolve, but Quebec maintains separate QST requirements.

Key Court Decisions

1. WebShop Inc., 2021 — Tax settings in Shopify must be correct

Court held seller responsible for uncollected taxes because Shopify settings were misconfigured.

2. Amazon FBA Import Case, 2020 — Import GST must match ITC claims

ITCs were denied because customs documentation did not list seller as importer-of-record.

3. RQ v. Digital Services Québec, 2019 — Digital products are taxable

Seller incorrectly claimed exemption for e-books and downloadable media. Reassessment confirmed they were taxable.

4. E-Com Retailer 9132, 2022 — Destination-based tax rules upheld

Seller charged GST/QST based on their own location instead of the customer’s location. Assessment confirmed.

These cases emphasize that platform errors do not replace legal obligations.

Why CRA and Revenu Québec Target E-Commerce Sellers

E-commerce is heavily audited due to:

1. Platform data transparency
   RQ obtains data directly from Shopify, PayPal, Stripe, and Amazon.

2. Importation mismatches
   FBA import data often conflicts with GST filings.

3. Small sellers unaware of rules
   Many assume platforms collect all taxes, which is incorrect.

4. High refund claims
   Large ITCs/ITRs for imports or advertising attract scrutiny.

5. International suppliers
   Dropshippers often fail to self-assess QST on imported goods.

6. Cash-flow complexity
   Platform commissions, advertising fees, and chargebacks complicate GST/QST reporting.

7. Multi-province sales
   Incorrectly charging QST to Ontario customers or vice versa is common.

Mackisen Strategy: How We Protect E-Commerce Sellers

We apply an e-commerce-focused GST/QST compliance system.

1. Platform Audit (Shopify/Amazon/Stripe/PayPal)

We review:

• tax configuration

• checkout rules

• province-based tax application

• export GST/QST reports

• transaction-level accuracy

2. Import and ITC Reconciliation

We confirm:

• importer-of-record status

• CBSA B3 forms

• import GST

• eligible ITCs for freight, duties, and FBA fees

3. Marketplace Commission Analysis

We review commissions from:

• Amazon

• Etsy

• eBay

• Shopify Payments

• Stripe

• PayPal

These fees are taxable and generate ITCs/ITRs.

4. Multi-Province Tax Setup

We design correct rules for:

• Quebec

• other provinces

• U.S. and international customers

5. Audit Defence

We handle:

• auditor communication

• platform data extraction

• import reconciliations

• sales-to-deposit matching

• classification of exports

6. Voluntary Disclosure

For sellers who never charged GST/QST or misreported multi-province sales, we file voluntary disclosure to reduce penalties.

Real Client Experience

A Quebec Shopify seller hit $400,000 in annual sales but had never turned on GST/QST in Shopify settings. RQ launched an audit covering two years.

Mackisen:

1. Reconstructed Shopify transaction history.

2. Calculated missing GST/QST based on customer province.

3. Identified over $27,000 in eligible ITCs/ITRs.

4. Filed voluntary disclosure to eliminate penalties.

5. Corrected Shopify tax settings for future compliance.

Outcome: The reassessment dropped from $71,000 to under $29,000.

Common Questions

Does Shopify collect GST/QST automatically?

No. You must enable these settings.

Does Amazon collect QST for sellers?

No. Sellers remain responsible for QST.

Can I claim ITCs for Facebook/Google ads?

Yes, if ads are used to promote taxable supplies.

Do dropshippers need to charge GST/QST?

Yes, if selling to Quebec consumers.

Are digital products taxable?

Most digital goods and services are taxable unless a specific exemption applies.

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.