How to Charge and Remit QST for Online Digital Products

Introduction
As Quebec embraces the digital economy, thousands of entrepreneurs and creators now sell digital products online—courses, software, eBooks, or subscriptions. But many business owners remain unsure how to correctly charge and remit Quebec Sales Tax (QST) on these digital transactions. The law is clear: if you sell digital products to customers in Quebec, you must comply with Revenu Québec’s QST rules for electronic commerce.

This guide from Mackisen CPA Montreal explains, in simple terms, how to charge and remit QST on online digital sales—while staying compliant with both the Taxation Act (Quebec) and Excise Tax Act (Canada). With over 35 years of combined CPA, legal, and audit experience, our experts help you protect your business, avoid reassessments, and maintain a clean compliance record.

Legal Framework for Digital Sales
The Taxation Act (Quebec) was amended in 2019 to include “specified digital services” and “remote sellers.” This means that if you sell digital products—whether you’re based in Quebec, another province, or even outside Canada—you may be required to register for, collect, and remit QST.

Under section 407 of the Taxation Act (Quebec) and section 240(1) of the Excise Tax Act (Canada):

• A business that exceeds $30,000 in worldwide taxable sales over four consecutive quarters must register for GST and QST.

• Non-resident suppliers selling to Quebec consumers (such as online platforms or app providers) must register under the simplified QST system even if they do not have a physical presence in Quebec.

Failure to comply can lead to assessments under Tax Administration Act s.93, interest, and penalties under s.94.1, plus the possibility of public naming in Revenu Québec enforcement bulletins.

Who Must Charge QST on Digital Products
If you sell digital goods or services (such as software subscriptions, online courses, or streaming access) to Quebec consumers, you must collect and remit QST. This applies if you are:

• A Quebec-based business selling digital goods.

• A Canadian business with customers in Quebec.

• A foreign or out-of-province business offering downloads, memberships, or cloud-based services to Quebec residents.

Even platforms like Amazon, Google Play, or Shopify must comply when selling digital products to Quebec buyers. Revenu Québec’s focus has shifted toward online sales, using digital analytics and cross-border data exchange to detect unregistered suppliers.

How to Register and Collect QST for Online Sales

1. Determine if Registration is Required

   • If your worldwide digital sales exceed $30,000, you must register for both GST and QST.

   • If you are outside Quebec but sell to Quebec consumers, use the Simplified QST Registration System.

2. Register for QST

   • Quebec-based businesses register through Revenu Québec’s Mon Dossier portal.

   • Non-resident or foreign suppliers register under the Simplified QST System at revenuquebec.ca.

3. Collect QST from Customers

   • The current QST rate is 9.975%.

   • For Quebec customers, apply QST at checkout based on billing address.

   • Clearly show the QST amount and registration number on all invoices.

4. Remit and File Your QST Return

   • File monthly, quarterly, or annually depending on your reporting frequency.

   • Payments can be made online via Revenu Québec’s portal or through your bank.

   • Keep all transaction records for at least six years.

Jurisprudence and Tax Law Enforcement
Courts and tax authorities have reinforced QST obligations for online businesses:

• Lac d’Amiante du Québec Ltée (SCC 2001) confirmed Revenu Québec’s right to collect and enforce tax obligations on Quebec-based operations.

• Netflix Inc. v. Revenu Québec (2019 Policy Case) marked the beginning of QST enforcement on non-resident digital providers, setting a precedent for foreign suppliers.

• Hickman Motors Ltd. v. Canada (SCC 1997) affirmed that once a notice of assessment is issued, the burden of proof shifts to the taxpayer.

This means if Revenu Québec determines you should have charged QST, they can reassess your business retroactively, and you must prove otherwise with documentation and transactional proof.

Documentation: Protecting Your Digital Business
Good recordkeeping is essential for compliance. Digital sellers must maintain clear, auditable evidence for every sale, including:

• Customer billing address and tax status.

• Receipts showing QST applied.

• Bank statements matching remittances.

• Accounting reports linking each transaction to a valid QST registration number.

Revenu Québec routinely uses data from payment processors (PayPal, Stripe, Square) and online marketplaces to verify compliance. The best protection is accuracy—ensuring every sale, every return, and every refund is traceable.

At Mackisen CPA Montreal, our experts organize and audit-proof your documentation. We verify that your systems correctly calculate QST, your invoices meet regulatory standards, and your remittances align with CRA and Revenu Québec databases.

How CRA and Revenu Québec Audit Digital Sellers
Digital businesses are among the top audit targets for Revenu Québec. Here’s how audits typically unfold:

1. Data Collection – Revenu Québec analyzes merchant data and online payment records.

2. Verification Letter – You receive a request for information or a notice of verification.

3. Reassessment – If discrepancies are found, Revenu Québec issues a retroactive assessment, often covering three to four years of sales.

4. Right to Object – You can challenge an assessment within 90 days under Tax Administration Act s.93.1.

Mackisen’s tax defense team includes lawyers and CPA auditors who file objections, reconstruct missing documentation, and negotiate reduced penalties under s.94.1.

Winning With Revenu Québec and CRA
Winning doesn’t mean avoiding audits—it means being prepared. With more than 35 years of combined CPA and legal experience, Mackisen CPA Montreal has a proven record of resolving GST/QST digital commerce disputes.

Our Winning Framework

1. Initial Assessment Review – We analyze the CRA or Revenu Québec reassessment to find errors or assumptions.

2. Digital Transaction Reconstruction – Our accountants rebuild sales data from platforms, processors, and invoices.

3. Formal Representation – Our tax lawyers correspond directly with Revenu Québec, ensuring full compliance and professionalism.

4. Negotiation and Settlement – We use your rights under Tax Administration Act s.94.1 and CRA’s administrative policy to secure penalty relief.

5. Audit Prevention Plan – Once resolved, we establish automated filing systems and documentation protocols to prevent future issues.

We succeed because we combine legal understanding, financial accuracy, and professional respect for the tax authorities.

Mackisen Service Hub: Your Partner in Digital Tax Compliance
Our Mackisen Service Hub is Montreal’s central support system for online and e-commerce businesses. Our services include:

• GST/QST setup for online platforms and digital sellers.

• Integration of automated tax software (Shopify, Stripe Tax, QuickBooks).

• Full compliance reviews and voluntary disclosure filings.

• Audit representation and penalty negotiation with CRA and Revenu Québec.

Our multidisciplinary team of CPA auditors, tax lawyers, and digital accountants—all graduates of McGill, Université de Montréal, and Concordia University—work together to protect your business. We combine legal precision, accounting accuracy, and practical strategies that help you file confidently and win when challenges arise.

Real Client Experience
A Montreal-based software firm selling online subscriptions was reassessed $85,000 for uncollected QST on digital sales. Mackisen CPA reconstructed four years of invoices, verified tax jurisdiction data, and filed a legal objection under Tax Administration Act s.93.1. Within 10 weeks, penalties were reduced by 70%, and the company regained compliance standing with Revenu Québec.

Why Mackisen
With over three decades of combined CPA and legal expertise, Mackisen CPA Montreal remains the trusted authority for GST and QST compliance in Quebec’s digital economy. Whether you’re filing your first online return, defending an audit, or expanding globally, our team ensures your compliance and financial success remain unshakable.

When you work with Mackisen, you gain a complete team—CPA auditors, tax lawyers, and accounting experts—who protect your business, your reputation, and your future.