How to Collect and Remit QST as a Small Business in Quebec

Introduction

Once you’re registered for QST (Quebec Sales Tax), your responsibility as a small business owner goes beyond just adding tax to invoices — you’re now a tax collector for the government. Every QST dollar collected belongs to Revenu Québec, and improper handling can lead to penalties, frozen accounts, or even personal liability.

This guide from Mackisen CPA Montreal explains how to properly collect, record, and remit QST as a small business in Quebec. You’ll learn when to charge tax, how to manage QST in your accounting, and how to remit it correctly through Mon dossier pour les entreprises to stay compliant and penalty-free.

Legal and Regulatory Framework

The Quebec Sales Tax Act (R.S.Q., c. T-0.1) and the Tax Administration Act (RLRQ, c. A-6.002) require every QST-registered business to collect and remit QST on taxable goods and services sold in Quebec.

• QST rate: 9.975%

• Collected on: Taxable goods and services, including most products, professional fees, and digital services.

• Administered by: Revenu Québec

Once you collect QST from customers, that money legally becomes a trust fund held on behalf of the Crown — not your business revenue.

Learning Insight

Revenu Québec treats QST like payroll deductions: once collected, it must be remitted on time. Using QST funds for operations is considered misuse of trust funds under Quebec law.

Step-by-Step: How to Collect and Remit QST

Step 1 — Register for QST

If your total taxable revenues exceed $30,000 in any 12-month period, you must register for QST immediately using Form LM-1-V via Mon dossier pour les entreprises.

Once registered, you’ll receive your QST number (format: 123456789 TQ0001). This number must appear on all invoices, receipts, and tax forms.

Step 2 — Charge QST on Every Taxable Sale

For sales made in Quebec:

• Apply QST (9.975%) on the subtotal after GST (5%).

• On invoices, clearly show:

  • Subtotal (before tax)

  • GST amount

  • QST amount

  • Total with taxes

Example:
Base price: $100
GST (5%): $5
QST (9.975% × $105): $10.48
Total: $115.48

If you sell outside Quebec, different rules apply — charge GST only or neither, depending on the customer’s province or country.

Learning Insight

Always calculate QST after adding GST — many small businesses mistakenly apply QST on the base price alone, leading to under-remittance errors.

Step 3 — Record QST Collected and Paid

In your accounting software (QuickBooks, Xero, Sage, or Wave):

• Record QST collected on sales separately from your business income.

• Record QST paid on eligible purchases (Input Tax Refunds, or ITRs).

Each month or quarter, reconcile:

QST Collected – QST Paid (ITRs) = Net QST Owing or Refund

Keep supporting documentation (invoices, receipts, contracts) for all transactions for six years, as required by law.

Step 4 — File and Remit QST via Mon dossier

1. Log in to revenuquebec.ca → Mon dossier pour les entreprises.

2. Under “Consumption Taxes,” select TVQ (QST).

3. Choose the filing period (monthly, quarterly, or annual).

4. Enter your taxable sales, QST collected, and eligible ITRs.

5. Submit electronically and record your confirmation number.

Then remit payment:

• Through online banking (add Revenu Québec – TVQ as a payee).

• By pre-authorized debit within Mon dossier.

• Using CRA’s “My Payment” service if you remit both GST and QST.

Learning Insight

Revenu Québec no longer mails paper confirmations. Always save your online filing PDF and bank payment receipt as proof of compliance.

Step 5 — Track Deadlines and Filing Frequency

Your filing frequency depends on your annual revenue:

• Monthly: over $6 million.

• Quarterly: between $1.5 and $6 million.

• Annual: $1.5 million or less.

Due Dates:

• Monthly and quarterly: one month after the period ends.

• Annual: three months after fiscal year-end.

Revenu Québec does not send reminders — missed deadlines trigger automatic penalties and interest.

Step 6 — Keep QST Funds Separate

To avoid cash flow problems, maintain a separate “Tax Trust Account” for GST/QST collections. Each time you collect QST from a client, transfer that portion into the trust account.

At filing time, remit directly from this account.

Learning Insight

Segregating tax funds ensures you never accidentally spend money that belongs to Revenu Québec. It also demonstrates good faith if audited.

Common Errors to Avoid

• Forgetting to register once the $30,000 threshold is reached.

• Charging only GST and not QST on Quebec sales.

• Applying QST incorrectly on the base price instead of after GST.

• Missing filing deadlines.

• Using QST funds for operating expenses.

Learning Insight

Most small business audits originate from basic reporting mistakes — not fraud. Accurate invoicing and proper recordkeeping prevent unnecessary penalties or reassessments.

Real Quebec Business Example

A Montreal hair salon collected QST but didn’t remit for two quarters, assuming it could “catch up later.” Revenu Québec froze its operating account and garnished payments from clients.

Another consulting firm filed and paid QST quarterly through Mon dossier on time — and received a refund for overpaid input taxes within three weeks.

Lesson: file and remit regularly, even when funds are tight.

Compliance Checklist

Do

• Register once sales exceed $30,000.

• Display QST registration number on all invoices.

• Collect QST on taxable sales within Quebec.

• File returns on time through Mon dossier.

• Keep a separate tax account for GST/QST funds.

Don’t

• Use QST funds for personal or business expenses.

• Delay filings or payments.

• File only GST and forget QST.

• Ignore Revenu Québec notices or reminders.

Mackisen Strategy

At Mackisen CPA Montreal, we help small businesses manage QST properly through:

1. Automated accounting system setup for tax collection and tracking.

2. Monthly reconciliation of QST collected vs. paid.

3. On-time electronic filing via Mon dossier pour les entreprises.

4. Compliance coaching to prevent penalties or reassessments.

We make QST compliance easy, organized, and stress-free — so you can focus on running your business.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps small businesses across Quebec register, collect, and remit QST accurately. From bookkeeping to filing and audit defense, we ensure precision, transparency, and protection from tax risk.