Insights
Nov 12, 2025
Mackisen
How to Ensure You Charge the Right Sales Tax Rate in Quebec (14.975% Total)
Introduction
Charging the correct sales tax rate in Quebec is one of the simplest yet most critical aspects of doing business. Getting it wrong—even by a small margin—can lead to penalties, customer disputes, and reassessments from Revenu Québec or the Canada Revenue Agency (CRA). The combined rate for most taxable goods and services in Quebec is 14.975%, made up of 5% GST (federal) and 9.975% QST (provincial).
At Mackisen CPA Montreal, we’ve helped hundreds of small businesses, contractors, and corporations ensure their invoices are accurate, compliant, and audit-proof. This guide explains how to apply GST and QST correctly, what laws govern these taxes, how to manage exceptions, and how our CPA and tax lawyer team can help you stay compliant while optimizing cash flow.
Legal and Regulatory Framework
Sales taxes in Quebec are regulated under two key laws:
The Excise Tax Act (Canada), governing GST/HST under section 165(1).
The Taxation Act (Quebec), governing QST under section 255(1) and section 407.
These laws require that businesses collect and remit GST and QST on taxable supplies, unless the goods or services are specifically exempt or zero-rated. Failing to charge the correct rate can result in retroactive assessments, penalties under Tax Administration Act (s. 59 and s. 94.1), and interest under Excise Tax Act s.280(1).
For most Quebec transactions:
GST = 5% (federal portion, collected for the CRA).
QST = 9.975% (provincial portion, collected for Revenu Québec).
Combined Rate = 14.975% on the selling price before taxes.
Who Must Charge 14.975% (GST + QST)
Any business registered for GST and QST must charge both taxes on all taxable sales of goods and services made to customers in Quebec, including:
Retailers and wholesalers.
Service providers (consultants, contractors, designers, IT firms, etc.).
E-commerce and online sellers shipping to Quebec customers.
Out-of-province businesses selling or delivering to Quebec consumers.
Businesses not registered for QST (and below the $30,000 small supplier threshold) are exempt from charging, but must register once that limit is exceeded.
Step-by-Step: How to Apply the Correct 14.975% Sales Tax Rate in Quebec
Confirm Customer Location
Apply QST only when the sale occurs in Quebec or the product/service is delivered to a Quebec address.
For sales outside Quebec, GST/HST or other provincial taxes may apply depending on destination.
Apply Taxes in the Right Order
QST is calculated on the selling price plus GST.
Example: $1,000 sale → GST (5%) = $50 → Subtotal = $1,050 → QST (9.975%) = $104.74 → Total = $1,154.74.
Display Both Taxes Separately
Every invoice must clearly show:
The amount of GST charged (5%).
The amount of QST charged (9.975%).
The total price including both taxes.
Verify Registration Numbers
Your invoice must display your GST and QST registration numbers:
GST (TPS) number from CRA: e.g., 123456789RT0001.
QST (TVQ) number from Revenu Québec: e.g., TQ1234567890.
Update Accounting Systems
Configure QuickBooks, Xero, or Sage to automatically apply 14.975% to taxable items.
Review quarterly to ensure the rates and rules are up to date.
Jurisprudence and Key Legal Insights
The courts have repeatedly confirmed that accuracy and transparency in charging taxes are legal obligations.
Hickman Motors Ltd. v. Canada (SCC 1997): Once an assessment is issued, it’s presumed correct unless proven otherwise by the taxpayer.
Canderel Ltd. v. Canada (SCC 1998): Returns must reflect commercial reality; careless invoicing is not a defense.
Lac d’Amiante du Québec Ltée (SCC 2001): Revenu Québec’s authority to audit, verify, and reassess is constitutionally valid.
These cases reinforce that “good faith” is not enough—accurate invoicing, recordkeeping, and tax calculations are mandatory under law.
Documentation: Building a Sales Tax Audit Shield
Good bookkeeping and documentation are the foundation of compliance. Keep:
All invoices with GST/QST amounts and registration numbers.
Proof of payment for sales and supplier expenses.
Accounting software reports showing taxes collected and remitted.
Annual reconciliation reports matching total sales to taxes remitted.
If Revenu Québec sends a verification notice, respond promptly, respectfully, and with complete evidence. Avoid verbal explanations—send organized documents and digital summaries instead.
Mackisen CPA’s documentation support team helps clients build digital tax files that are easy to retrieve and audit-proof. We create a clear trail linking every sale, every tax, and every remittance.
Common Mistakes Businesses Make When Charging Sales Tax
Forgetting to apply QST on top of GST in Quebec.
Charging GST/HST only (used for other provinces).
Not updating POS or e-commerce systems after tax rate changes.
Failing to register once surpassing $30,000 in sales.
Missing QST on shipping or digital product fees.
Each of these errors can trigger a reassessment under Tax Administration Act s.93, requiring back payment of taxes plus interest and penalties.
How CRA and Revenu Québec Handle Sales Tax Reassessments
Auditors cross-check declared taxes with your sales records, merchant processor data, and client invoices. If discrepancies are found, they may issue a Notice of Reassessment covering multiple periods. You have the right to object within 90 days under Tax Administration Act s.93.1 and Income Tax Act s.165(1).
Mackisen CPA’s team of tax lawyers and CPA auditors prepares the objection, reconstructs documentation, and negotiates reductions or full reversals when errors are honest and properly documented.
Winning With Revenu Québec and CRA
Winning means precision, professionalism, and preparedness. At Mackisen CPA Montreal, we have decades of experience defending businesses accused of charging or remitting incorrect taxes. Our 35+ years of combined CPA and legal expertise have helped hundreds of Quebec businesses achieve fair settlements and full compliance.
Our Proven Winning Framework
Case Analysis – We review your invoices, filings, and sales data line by line for inconsistencies.
Evidence Reconstruction – We rebuild missing invoices and reconcile GST/QST collected vs. remitted.
Professional Representation – Our tax lawyers communicate directly with CRA and Revenu Québec.
Negotiation and Settlement – We use your rights under Tax Administration Act s.94.1 and CRA’s Policy P-148 to seek penalty relief.
Compliance Implementation – We train your internal staff to apply the 14.975% rate correctly across all sales channels.
Mackisen Service Hub: Precision, Compliance, and Confidence
Our Mackisen Service Hub is Montreal’s trusted compliance center for GST and QST management. We assist clients with:
Correct tax registration for new or expanding businesses.
Tax code setup in accounting systems and e-commerce platforms.
Monthly or quarterly sales tax reconciliation and filing.
CRA and Revenu Québec audit defense and correspondence.
Our CPA auditors, tax lawyers, and accounting experts—all graduates from McGill University, Université de Montréal, and Concordia University—combine legal, financial, and practical experience to keep your sales tax operations bulletproof.
Real Client Example
A Quebec construction company mistakenly charged GST only for 18 months on local projects. Revenu Québec reassessed $64,000 in unpaid QST plus penalties. Mackisen CPA reconstructed all invoices, refiled returns, and negotiated a reduction under s.94.1 of the Tax Administration Act. The company paid only $9,500 after penalty relief and now has a flawless tax system in place.
Why Mackisen
With more than 35 years of combined CPA and legal experience, Mackisen CPA Montreal ensures your GST/QST compliance is flawless. We don’t just help you charge the right rate—we build systems that protect your business, your reputation, and your profitability for years to come.
