How to Determine if You Need to Register for QST (Quebec Sales Tax)

Introduction

If you’re starting a business in Quebec, one of your first legal questions is: Do I need to register for QST (Quebec Sales Tax)?

Many entrepreneurs mistakenly assume registration is optional until they grow, but under Quebec law, once your taxable revenues reach a certain level or your business operates in specific sectors, registration becomes mandatory.

This guide from Mackisen CPA Montreal explains how to determine whether you must register for QST, when voluntary registration makes sense, and what exemptions exist — all to help you stay compliant with Revenu Québec from day one.

Legal and Regulatory Framework

QST is governed by the Quebec Sales Tax Act (R.S.Q., c. T-0.1) and administered by Revenu Québec under the Tax Administration Act (RLRQ, c. A-6.002).

The law requires every business that makes taxable supplies of goods or services in Quebec to register and collect QST once specific thresholds are met.

You may also have to register for GST (Goods and Services Tax) under the federal Excise Tax Act (R.S.C. 1985, c. E-15) at the same time, since both systems operate in parallel.

Step-by-Step: How to Know If You Must Register

Step 1 — Check Your Revenue Threshold

You must register for QST if your total worldwide taxable revenues exceed $30,000 in any consecutive 12-month period.

This threshold includes:

• All sales made in Canada and abroad.

• Sales from associated entities (if applicable).

• Revenues from taxable goods and services (excluding exempt or zero-rated supplies).

Example:
If you earn $25,000 in the first six months and $8,000 in the next six, you’ve exceeded the $30,000 threshold and must register immediately.

Step 2 — Understand What “Taxable Supplies” Mean

Taxable supplies include:

• Goods sold or leased in Quebec.

• Services rendered in Quebec.

• Digital products or software sold to Quebec customers.

• Short-term accommodation, catering, or consulting services.

If your activity falls into these categories, you likely need to collect QST once registered.

Step 3 — Identify If You’re a “Small Supplier”

You are considered a small supplier if:

• Your taxable revenues (worldwide) are $30,000 or less over four consecutive calendar quarters.

• You operate as an individual, partnership, or corporation.

Small suppliers are not required to register for QST but may do so voluntarily.

Step 4 — Consider Voluntary Registration

Voluntary registration can be beneficial even if you’re below the threshold. It allows you to:

• Claim Input Tax Refunds (ITRs) on QST paid for business expenses.

• Build credibility with suppliers and customers.

• Prepare for future growth and compliance.

Example:
A self-employed graphic designer earning $28,000 annually registers voluntarily to recover QST paid on equipment, software, and rent — saving over $1,200 in the first year.

Learning Insight

If your business regularly incurs QST expenses, voluntary registration improves cash flow and reduces costs, even before you cross the $30,000 mark.

Step 5 — Know the Exceptions and Special Cases

A. Exempt Businesses

You are not required to register for QST if your activities are fully exempt, such as:

• Financial and insurance services.

• Residential rent.

• Health, medical, and dental services.

• Educational or daycare services.

These sectors cannot charge QST or claim Input Tax Refunds (ITRs).

B. Out-of-Province or Non-Resident Businesses

If you are based outside Quebec but make sales to Quebec consumers, you may still be required to register under the Specified QST System (SQST) if:

• You sell more than $30,000 worth of goods or digital services to Quebec customers in a 12-month period.

• You deliver products into Quebec or operate an e-commerce store targeting Quebec residents.

C. Charities and Public Institutions

Registered charities, municipalities, and government entities follow special QST registration rules. Consult a CPA before filing.

Step 6 — Register Once the Threshold Is Reached

Once your taxable revenues exceed $30,000, you must register immediately. Revenu Québec may backdate your registration to the date you crossed the threshold and assess uncollected QST retroactively — plus interest and penalties.

You can register online using Form LM-1-V (Application for Registration) via Mon dossier pour les entreprises.

Learning Insight

Revenu Québec can access bank deposits and payment processor records (PayPal, Shopify, Stripe) to verify undeclared revenues. It’s safer to register voluntarily than to face retroactive assessments.

Common Mistakes to Avoid

• Waiting until year-end to calculate the $30,000 threshold.

• Assuming out-of-province sales are exempt.

• Forgetting to include online or digital sales.

• Failing to collect QST after registration.

• Not applying for GST registration at the same time.

Learning Insight

Failure to register doesn’t erase your obligation — it only increases the cost later. Retroactive filings can be expensive and difficult to defend during audits.

Real Quebec Business Example

A Montreal home-based caterer crossed $30,000 in August but didn’t register until December. Revenu Québec assessed four months of unpaid QST plus $1,100 in penalties.
A consulting firm earning under $30,000 voluntarily registered and recovered nearly $2,000 in QST on start-up costs.

Lesson: track your revenues monthly and register early to avoid interest and lost refunds.

Compliance Checklist

Do

• Track total worldwide revenues monthly.

• Register once you reach $30,000 in taxable sales.

• Consider voluntary registration to claim ITRs.

• Register for both GST and QST together.

• Keep proof of registration and filing confirmations.

Don’t

• Assume your accountant or platform registered you automatically.

• Delay registration after reaching the threshold.

• Ignore QST for online or cross-border sales.

• Forget to collect QST after registration is approved.

Mackisen Strategy

At Mackisen CPA Montreal, we help new and growing businesses stay compliant from day one. Our team:

1. Tracks sales thresholds monthly to alert you before you cross limits.

2. Prepares and submits LM-1-V registration forms.

3. Sets up your Mon dossier and CRA accounts for dual GST/QST management.

4. Implements automatic reminders and QST invoicing templates.

We ensure you never miss a registration deadline or refund opportunity.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps Quebec entrepreneurs launch and grow their businesses the right way — legally, strategically, and tax-compliantly. We manage every step from registration to filing and audit defense.