How to De-Register for GST/QST When Closing a Business

Introduction
When you close, sell, or stop operating your business in Quebec, you are legally required to de-register for GST (Goods and Services Tax) and QST (Quebec Sales Tax). Failing to cancel your tax accounts can result in continued filing obligations, penalties for missed returns, and unexpected reassessments.

Many entrepreneurs mistakenly assume that stopping operations automatically ends their GST/QST responsibilities it does not. You must officially inform both the Canada Revenue Agency (CRA) and Revenu Québec (ARQ) that your business has ceased, file your final returns, and remit or recover any remaining balance.

At Mackisen CPA Montreal, we guide business owners through every step of the deregistration process from final filings to account closure ensuring a smooth and compliant transition. This guide explains how to legally de-register your GST/QST accounts, avoid penalties, and finalize your business closure properly.

Legal and Regulatory Framework
The requirement to cancel your GST and QST accounts is governed by:

• Excise Tax Act (Canada) s.242(1) — requires any registrant who stops making taxable supplies to request cancellation of registration.

• Taxation Act (Quebec) s.407(2) — obliges registrants to notify Revenu Québec when commercial activities end.

• Tax Administration Act (Quebec) s.93 — authorizes reassessment if a business continues to hold an active registration without filing returns.

• Excise Tax Act s.280(1) and Tax Administration Act s.59(3) — impose daily compounded interest on unpaid amounts.

Until CRA and Revenu Québec confirm cancellation, your filing obligations remain active.

Step-by-Step: How to De-Register for GST/QST When Closing a Business

1. Confirm That All Business Activities Have Ceased

   • Ensure that you have issued your final invoices and collected all taxes.

   • Cancel any ongoing contracts or subscriptions generating taxable income.

   • Settle outstanding accounts payable and receivable.

2. File All Outstanding GST/QST Returns

   • Submit returns up to the date of business cessation.

   • Report all sales, taxes collected, and Input Tax Credits (ITCs) or Input Tax Refunds (ITRs).

   • Pay any remaining balance owing.

3. Adjust for Remaining Business Assets

   • If you keep business assets (like vehicles or equipment) after closing, you may owe self-assessed GST/QST on the fair market value.

   • Include this adjustment in your final return.

4. Request Cancellation of GST Account (CRA)

   • Log in to CRA’s My Business Account (http://canada.ca/my-business-account).

   • Select “Close account” under the GST/HST program.

   • Enter the effective date of closure — the day your last taxable supply was made.

   • CRA will issue a confirmation letter once the cancellation is processed.

5. Request Cancellation of QST Account (Revenu Québec)

   • Log in to Revenu Québec’s Mon Dossier portal (http://revenuquebec.ca/mon-dossier).

   • Select “Close a program” and choose QST.

   • Provide your QST number (TQ...), business closure date, and reason for cancellation.

   • Revenu Québec will send written confirmation of deregistration.

6. Maintain Proof of Closure

   • Keep CRA and Revenu Québec confirmation letters and your final return filings for six years under Tax Administration Act s.34.

7. Cancel Related Accounts and Licenses

   • If applicable, also close payroll, import/export, and provincial registration accounts.

   • Update your NEQ (Numéro d’entreprise du Québec) at the Registraire des entreprises.

Jurisprudence and Legal Insights
Several legal precedents highlight the importance of timely deregistration:

• Canderel Ltd. v. Canada (SCC 1998) — filings must reflect the true commercial reality; inactive accounts that remain open are misleading.

• Lac d’Amiante du Québec Ltée (SCC 2001) — Revenu Québec may reassess any business that fails to cancel its QST number after ceasing operations.

• Hickman Motors Ltd. v. Canada (SCC 1997) — once assessed, taxpayers bear the burden of proving cessation and compliance.

These cases underscore that deregistration is not optional — it’s a legal obligation that prevents future audits and interest charges.

Documentation: What to Keep After Deregistration
After your accounts are closed, retain:

• CRA and Revenu Québec deregistration confirmation letters.

• Final GST and QST returns and payment receipts.

• Correspondence related to closing requests.

• Financial statements and closing trial balance.

• Records of tax on retained assets (if applicable).

• Bank records showing final remittances.

Mackisen CPA builds a Final Closure Binder for each client — containing every proof of deregistration, audit defense documentation, and reconciliation for peace of mind.

How CRA and Revenu Québec Verify Business Closures
Both agencies routinely cross-check deregistration requests against other data sources:

• CRA reviews business bank activity, payroll filings, and T2 corporate returns.

• Revenu Québec compares QST filings with the Registraire des entreprises and NEQ status.

• If they find continued income or commercial activity after closure, they can reinstate the tax account retroactively and issue reassessments.

To prevent this, ensure all related registrations and filings are aligned with your closure date.

Winning With CRA and Revenu Québec
At Mackisen CPA Montreal, we handle every detail of your GST/QST deregistration so you can close your business confidently:

1. Full Account Review – We verify outstanding filings and payments.

2. Final Tax Return Preparation – We calculate all adjustments and final balances.

3. Deregistration Filing – We complete CRA and Revenu Québec closure requests.

4. Audit-Proof Documentation – We compile confirmation letters, statements, and evidence.

5. Penalty Relief Applications – If delays occurred, we file relief under Tax Administration Act s.94.1 or CRA Policy P-148.

Mackisen Service Hub: Business Exit and Deregistration Specialists
Our Mackisen Service Hub provides end-to-end support for closing businesses in Quebec, including:

• GST/QST deregistration and final filing management.

• CRA and ARQ account closure coordination.

• Post-closure audit defense and documentation storage.

• Tax clearance certificates for business owners.

Our bilingual professionals CPA auditors, tax lawyers, and accountants trained at McGill, Université de Montréal, and Concordia University work together to ensure your business exit is clean, compliant, and stress-free.

Real Client Example
A Montreal IT consultant shut down operations but didn’t de-register their QST account for eight months. Revenu Québec assessed $3,600 in penalties for unfiled returns. Mackisen CPA filed a retroactive deregistration, submitted final returns, and applied for relief under s.94.1 of the Tax Administration Act. The penalties were fully cancelled, and the client received a confirmation of closure from both agencies.

Why Mackisen
With over 35 years of combined CPA and legal experience, Mackisen CPA Montreal is Quebec’s trusted partner for business closures and deregistration. We manage every detail from your final filings to proof of cancellation so you can close your business permanently and cleanly.

When you close with Mackisen, you leave nothing behind no penalties, no outstanding accounts, and no compliance risks only a perfectly documented conclusion to your business journey.