How to Charge Sales Tax in Quebec as an Out-of-Province Business

Introduction
If your business is located outside Quebec but sells to customers in the province, you may still have to register, collect, and remit Quebec Sales Tax (QST). Since 2019, Revenu Québec has expanded its rules to require out-of-province and foreign suppliers — including online retailers, service providers, and digital platforms — to charge QST on sales to Quebec consumers.

These regulations ensure fair competition between Quebec and non-Quebec sellers. But many out-of-province businesses are unaware of their obligations or apply the wrong taxes, risking penalties, audits, and backdated assessments.

At Mackisen CPA Montreal, we help Canadian and international companies stay compliant with Quebec’s tax laws while maintaining smooth operations and strong customer trust. This guide explains how to determine whether you must charge QST in Quebec, how to register, and how to manage both GST and QST from outside the province.

Legal and Regulatory Framework
The key laws governing sales tax for out-of-province businesses are:

• Taxation Act (Quebec) s.407.1 — requires non-resident suppliers of taxable goods, services, or digital products to register and collect QST.

• Tax Administration Act (Quebec) s.93 — allows Revenu Québec to assess non-compliant suppliers for uncollected QST.

• Excise Tax Act (Canada) s.240(1) — mandates GST registration for businesses selling taxable supplies in Canada exceeding $30,000 in annual revenues.

• Revenu Québec 2019 Simplified Registration System — introduced new rules for out-of-province and foreign suppliers.

These laws apply to both Canadian businesses outside Quebec and foreign businesses (e.g., U.S. or European digital companies).

Step-by-Step: How to Charge Sales Tax in Quebec as an Out-of-Province Business

1. Determine Whether You Must Register for QST
   You must register if your business meets all of the following:

   • You sell taxable goods, services, or digital products to customers residing in Quebec.

   • The customers are not registered for QST (i.e., end consumers, not businesses).

   • Your total sales to Quebec exceed $30,000 annually.

   Businesses selling exclusively to QST-registered companies (B2B) generally do not need to collect QST, since the buyer self-assesses.

2. Understand the Two Types of Registration Systems
   Revenu Québec offers two different systems:

   (a) Regular QST Registration (Full Program)

   • Used by Canadian businesses with a physical presence or significant commercial activity in Quebec.

   • You collect QST at 9.975% and can claim Input Tax Refunds (ITRs) on your Quebec expenses.

   (b) Simplified QST Registration System

   • Designed for out-of-province and foreign businesses without a Quebec establishment.

   • You collect QST from Quebec consumers but cannot claim ITRs.

   • Returns and payments are submitted through a simplified online portal.

3. Register for QST (Simplified or Regular System)

   • Go toRevenu Québec’s registration page and select the applicable system.

   • Provide:

     • Legal business name and address.

     • Federal Business Number (BN).

     • Estimated annual sales to Quebec.

     • Contact information and principal place of business.

   • You’ll receive a QST number (TQ...) within 5–10 business days.

   For businesses already registered for GST, Revenu Québec and CRA will automatically coordinate information to streamline dual reporting.

4. Charge and Display QST Correctly

   • Apply 9.975% QST on taxable sales to Quebec customers.

   • Clearly show QST and GST as separate lines on invoices:

     • GST (5%)

     • QST (9.975%)

   • Indicate both registration numbers on each invoice.

   • Use the customer’s Quebec shipping or billing address to determine tax applicability.

5. File and Remit QST

   • File QST returns quarterly or annually through Revenu Québec’s Mon Dossier (regular system) or Simplified System portal.

   • Pay electronically via online banking or credit card.

   • Keep proof of payment and filing confirmations.

6. Maintain Records for Six Years
   Under Tax Administration Act s.34, you must keep detailed records of:

   • Sales invoices and receipts.

   • Customer addresses (to prove Quebec residency).

   • Taxes collected and remitted.

   • Correspondence with Revenu Québec.

   • Bank proof of payments.

Jurisprudence and Legal Insight
Several legal and administrative rulings define how Quebec’s out-of-province tax rules apply:

• Airbnb Ireland UC v. Revenu Québec (2019) — confirmed foreign digital platforms must collect QST on sales to Quebec residents.

• Lac d’Amiante du Québec Ltée (SCC 2001) — reaffirmed Revenu Québec’s authority to audit and assess non-resident entities doing business in Quebec.

• Canderel Ltd. v. Canada (SCC 1998) — established that tax filings must reflect true economic activity, regardless of jurisdiction.

These precedents highlight the importance of accurate QST registration and tax reporting for cross-border commerce.

Documentation: Keeping Your Quebec Tax File Audit-Ready
Maintain a separate Quebec Tax Compliance File including:

• QST registration confirmation.

• Copies of all Quebec invoices showing GST/QST collected.

• Proof of remittances and filing confirmations.

• Customer records and delivery addresses.

• Annual reconciliations of sales to Quebec customers.

At Mackisen CPA Montreal, we prepare and maintain full compliance binders for out-of-province clients, ensuring every transaction meets Revenu Québec’s strict audit standards.

How Revenu Québec Audits Out-of-Province Businesses
Revenu Québec uses data-sharing agreements with CRA and digital platforms to monitor compliance. Auditors review:

• Whether you are properly registered under QST.

• Your Quebec sales volumes vs. declared revenue.

• Whether QST was collected and remitted for consumer transactions.

• Customer location verification (Quebec residency proof).

• Accuracy of refund or adjustment claims.

Failure to register or remit can result in penalties, interest, and assessments under Tax Administration Act s.59(3).

Winning With Revenu Québec and CRA
At Mackisen CPA Montreal, we help out-of-province businesses succeed in Quebec’s tax environment through:

1. Eligibility Assessment – We determine whether you must register and under which system.

2. Registration and Setup – We handle QST and GST registration on your behalf.

3. Invoicing Compliance – We customize your billing systems to charge QST correctly.

4. Filing and Payment – We manage all filings through Revenu Québec and CRA portals.

5. Audit Defense – Our CPA auditors and tax lawyers represent you in case of verification or dispute.

Mackisen Service Hub: Out-of-Province Compliance Experts
Our Mackisen Service Hub offers full GST/QST compliance management for non-Quebec businesses, including:

• QST registration and reporting setup.

• Tax integration for e-commerce platforms (Shopify, Amazon, WooCommerce).

• Cross-border invoicing and filing automation.

• Audit defense and voluntary disclosure applications.

Our bilingual experts CPA auditors, tax lawyers, and compliance advisors trained at McGill, Université de Montréal, and Concordia University, deliver trusted expertise for Canadian and international clients expanding into Quebec.

Real Client Example
An Ontario-based software company began selling subscriptions to Quebec clients but failed to register for QST. Revenu Québec issued a notice to collect $58,000 in backdated QST. Mackisen CPA registered the company under the Simplified System, filed retroactive returns, and negotiated penalty relief under Tax Administration Act s.94.1, reducing the amount owed by 80%.

Why Mackisen
With over 35 years of combined CPA and legal experience, Mackisen CPA Montreal helps out-of-province businesses enter and operate in Quebec seamlessly and compliantly. We simplify tax registration, ensure correct invoicing, and protect your business from unnecessary penalties and audit risks.

When you expand into Quebec with Mackisen, you gain more than compliance you gain clarity, confidence, and complete control over your GST and QST obligations.