HOW DOES THE GST/QST QUICK METHOD WORK? IS IT RIGHT FOR ME?

The GST/QST Quick Method is a simplified way for small businesses in Quebec to calculate the sales tax they must remit. Instead of tracking every dollar of GST/QST collected and every input tax credit/refund (ITC/ITR), the Quick Method lets businesses apply a reduced remittance rate to their taxable sales. The result: less paperwork, easier bookkeeping, and fewer errors. But the Quick Method is not right for everyone and choosing the wrong method can cost your business money.

This guide explains how the Quick Method works, who qualifies, how remittances are calculated, and whether your business should consider using it.

LEGAL AND REGULATORY FRAMEWORK

The Quick Method is defined in:

• the Excise Tax Act (GST)
• the Quebec Taxation Act (QST)

Eligible businesses may elect to use the Quick Method instead of the regular method. The election must be filed formally and remains in effect until revoked.

Under the Quick Method:

• you still charge customers full GST and QST
• you remit only a portion of what you collect
• you generally cannot claim ITCs/ITRs, except for certain capital purchases

KEY COURT DECISIONS

Courts have emphasized that:

• the Quick Method must be applied consistently once elected
• incorrect application results in reassessments
• businesses must maintain documentation of taxable sales
• GST/QST collected must still be shown on invoices
• the election remains valid even if the business changes systems, unless revoked

WHY BUSINESSES USE THE QUICK METHOD

The method is attractive because it:

• reduces bookkeeping complexity
• removes the need to track ITCs/ITRs on every purchase
• prevents documentation errors
• simplifies filing
• provides predictable tax remittances

For some businesses, it creates real financial advantages; for others, it reduces refunds.

WHO QUALIFIES FOR THE QUICK METHOD?

To qualify:

• your worldwide taxable revenues must generally be $400,000 or less
• you must be engaged primarily in eligible services or activities
• you must file a formal election (FP-505. D. A for QST; GST74 for GST)

Examples of eligible businesses:

• consultants
• freelancers
• service providers
• IT specialists
• designers
• small retailers
• online businesses
• personal services businesses

WHO DOES NOT QUALIFY?

The Quick Method is not available to:

• accountants and financial advisors
• lawyers
• real estate agents
• listed financial institutions
• charities and public service bodies
• builders and construction contractors
• taxi and ride-share drivers
• businesses claiming large ITCs/ITRs

HOW DOES THE QUICK METHOD WORK?

Here is the simplified flow:

1. Charge customers the full GST (5%) and QST (9.975%).

2. Do not track input tax credits/refunds on regular expenses.

3. Apply the Quick Method remittance rates to your taxable sales.

4. Remit the reduced amount to Revenue Québec.

5. Keep the difference as your benefit (minus tax on purchases where ITCs/ITRs still apply on capital assets).

WHAT ARE THE QUICK METHOD REMITTANCE RATES?

The remittance rates depend on:

• whether your business is service-based or retail
• whether your business buys and resells goods
• whether your business has permanent establishments outside Quebec

For most service businesses in Quebec, the remittance rates are approximately:

• 3.4% for GST
• 6.6% for QST

(Exact rates vary depending on activity — a CPA should verify your category.)

EXAMPLE OF QUICK METHOD IN ACTION

A freelancer invoices client:

• $100,000 in taxable services
• GST at 5% = $5,000
• QST at 9.975% = $9,975
• Total tax collected: $14,975

Under the Quick Method, instead of remitting $14,975, the business might remit:

• $100,000 × 3.4% = $3,400 (GST)
• $100,000 × 6.6% = $6,600 (QST)

Total remitted: $10,000
Benefit retained: $4,975

If the business had few expenses with GST/QST, this is a net gain.

WHEN THE QUICK METHOD IS NOT BENEFICIAL

The Quick Method may cost you money if:

• your business has high expenses with GST/QST
• you purchase inventory
• you buy significant equipment regularly
• you pay high subcontractor invoices with tax
• you operate with slim profit margins
• you qualify for large ITCs/ITRs under the regular method

In these cases, you would lose valuable input tax credits.

HOW TO ELECT THE QUICK METHOD

To register:

• File form FP-505.D.A with Revenue Québec for QST
• File form GST74 with CRA for GST
• Mark the effective date (often at the start of a fiscal year)

The election stays in effect until you file a revocation.

HOW TO LEAVE THE QUICK METHOD

To stop using it:

• file the revocation form with both Revenue Québec and CRA
• switch back at the beginning of a fiscal year
• adjust your accounting system for regular GST/QST tracking

MACKISEN STRATEGY

Mackisen CPA evaluates whether the Quick Method is financially advantageous for your business. We analyze:

• sales volume
• expense structure
• ITC/ITR eligibility
• tax rates
• profitability
• filing frequency

We also help complete Quick Method elections, configure accounting systems, and file returns under the simplified approach — or transition businesses back to the regular method.

REAL CLIENT EXPERIENCE

A Montreal consultant switched to the Quick Method and saved thousands in net tax remittances.

A small retailer with high inventory costs lost money using the Quick Method until Mackisen helped them switch back.

An IT freelancer had inconsistent bookkeeping. Using the Quick Method simplified compliance and reduced audit risk.

COMMON QUESTIONS

Is the Quick Method always cheaper?
No. It depends on your expenses and ITC eligibility.

Can I claim ITCs under the Quick Method?
Only on specific capital assets — not regular expenses.

Can I use the Quick Method temporarily?
Yes, but elections and revocations must follow formal rules.

Will Revenue Québec question Quick Method returns?
They may verify sales totals, but the method is recognized by law.

WHY MACKISEN

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps small businesses choose the right GST/QST reporting method. Our analysis ensures financial optimization, reduced workload, and full compliance with Quebec sales tax rules.