How to Ensure You Charge the Right Sales Tax Rate in Quebec (14.975% Total) — Montreal CPA

Quebec’s combined sales tax rate — 14.975% — is one of the most misunderstood tax calculations in Canada. Most entrepreneurs know the numbers but not the formula. The QST rate is 9.975%, but unlike GST, it must be applied on the GST-inclusive amount. One small mistake in this calculation leads to under-collected tax, which Revenue Québec will demand from you out of pocket. Over-collecting tax is equally dangerous because customers can legally dispute their invoices and request refunds. Incorrect tax application is one of the top reasons Revenue Québec audits small businesses. This guide explains how to apply Quebec’s sales tax rate correctly and avoid costly reassessments, using Mackisen’s gold-standard invoicing system.

Why This Matters
Every sale your business makes is affected by GST/QST. If the calculation is wrong, every invoice is wrong. If you undercharge QST, Revenue Québec will still require you to remit the correct amount — meaning you must pay the shortfall. If you overcharge, you will need to issue credit notes, correct your filings, and potentially face customer complaints. A tiny tax-setting error in Shopify, QuickBooks, Square, or any POS system can create thousands of dollars in losses or tax reassessments.

Legal and Regulatory Framework
GST calculation rules fall under the Excise Tax Act; QST rules fall under Quebec’s Tax Administration Act. The law requires QST to be calculated on the GST-inclusive amount. Hickman Motors (1997) establishes that taxpayers must maintain proper documentation and accurate tax calculations. Lac d’Amiante (2001) confirms that RQ may reassess for incorrect tax even years later.

The 14.975% Audit Trap
Imagine processing 12,000 sales through Shopify over two years. You assume your platform calculates taxes correctly. One day, Revenue Québec audits your digital sales. They discover QST was calculated only on the base price — not the GST-inclusive amount. You under-collected QST by $14,000. Revenue Québec demands immediate repayment plus interest. Your refund is frozen. Your file is flagged for further review. Your accounting software configuration accidentally caused a two-year tax liability — and now the responsibility is yours. This happens every week in Quebec, especially for e-commerce sellers.

Learning Section: Understanding the Correct Tax Formula
Quebec sales tax is not calculated like typical PST systems. The formula is specific:
Step 1: GST = 5% of the sale subtotal
Step 2: Add GST to the subtotal
Step 3: QST = 9.975% of this new total
Example:
Subtotal: $100
GST: $5
Subtotal + GST = $105
QST = 9.975% × $105 = $10.47
Total invoice = $115.47
Wrong calculation = audit exposure.

SEO Learning: Primary and Secondary Keywords
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How to Ensure Correct Tax Calculation
Do the following:
Set up tax codes correctly in your accounting software
Ensure QST is configured as “9.975% on GST-inclusive amount”
Test your invoices monthly for accuracy
Verify e-commerce platform tax settings
Review POS tax configuration
Reconcile GST/QST accounts monthly
Make sure all invoices show GST and QST separately
Confirm digital products are taxed correctly
Correct any past calculation errors immediately

Documentation Section
Invoice templates
POS and e-commerce tax settings
Accounting software tax configuration
Reconciliation worksheets
Sample invoice calculations
CRA/RQ filing confirmations
Keep all documents for six years to support your calculations in case of an audit.

Common Mistakes
Charging QST on the base price instead of the GST-inclusive price
Using U.S.-based tax settings in Shopify/Square
Not showing GST/QST separately on invoices
Failing to update tax settings after software updates
Confusing exempt vs zero-rated items
Incorrect interprovincial tax charging
Not reconciling platform payout reports

Winning With Revenue Québec and Canada
Mackisen configures your invoicing system, verifies calculations, tests all tax codes, and performs monthly audits of POS and e-commerce platforms. We detect QST errors early, correct them immediately, and protect you from reassessments. Our standardized method ensures perfect compliance with Quebec’s unique 14.975% tax rules.

Mackisen Service Hub
We provide:
Tax configuration for all platforms
Invoice template creation
GST/QST account reconciliation
POS/e-commerce tax audits
Correction filings
Audit-defense file preparation
Refund-release support
All work is led by CPAs with 35+ years of sales tax expertise.

Why Mackisen
Mackisen CPA Montreal ensures your tax calculations are exact, compliant, and fully defensible against Revenue Québec audits. With our knowledge of Quebec’s invoicing laws and software systems, we protect your business from costly errors and ensure smooth, consistent compliance.