How to File GST/QST Returns for Multiple Provinces (Inter-Provincial Sales)

Introduction

If your Quebec business sells goods or services across Canada — to clients in Ontario, Alberta, British Columbia, or other provinces — your GST/QST obligations change depending on the buyer’s location. Each province has its own rules on when to charge GST, QST, or HST, and these rules directly affect how you file your returns with Revenu Québec and the Canada Revenue Agency (CRA).

This comprehensive guide from Mackisen CPA Montreal explains how to manage inter-provincial sales, apply the correct tax rates, and report them properly in your GST/QST filings. It’s essential reading for any Quebec-based company doing business nationwide.

Legal and Regulatory Framework

The tax treatment of inter-provincial sales is governed by:

• Excise Tax Act (R.S.C. 1985, c. E-15) — for GST/HST.

• Quebec Sales Tax Act (R.S.Q., c. T-0.1) — for QST.

• Tax Administration Act (RLRQ, c. A-6.002) — for Quebec compliance and enforcement.

GST/HST is a federal system administered by the CRA.
QST is provincial, administered by Revenu Québec.
When selling across provinces, you may need to charge either GST only, HST, or both GST and QST depending on where your customer is located and how the goods or services are delivered.

Learning Insight

In Canada, tax follows the destination — meaning you must apply the tax rate of the province where the product or service is delivered or used, not where your business is located.

Step-by-Step: How to File GST/QST for Inter-Provincial Sales

Step 1 — Identify Where Your Customer Is Located

The customer’s delivery address or place of consumption determines which taxes apply.

Learning Insight

For sales to HST provinces, you charge one single HST rate through CRA — not separate GST/QST. For sales to non-HST provinces, charge GST only (no QST).

Step 2 — Apply Correct Tax Rates on Sales

Example

A Quebec business sells $10,000 worth of goods to:

• Quebec client → GST 5% ($500) + QST 9.975% ($997.50)

• Ontario client → HST 13% ($1,300)

• Alberta client → GST 5% ($500)

Total taxes collected: $2,797.50 (reported in different filings).

Step 3 — File Your Returns

For QST (Revenu Québec)

Report only sales made to Quebec customers.

• Enter total taxable Quebec sales and QST collected.

• File through Mon dossier pour les entreprises.

• Do not include out-of-province sales (they are not QST taxable).

For GST/HST (CRA)

Report all Canadian taxable sales, including those outside Quebec.

• GST and HST collected across provinces are combined in one federal return.

• CRA automatically allocates HST to the proper provinces.

• File through My Business Account or by paper.

Learning Insight

You file two separate returns — one to Revenu Québec (QST) and one to CRA (GST/HST). Each must accurately reflect your taxable base for the regions they govern.

Step 4 — Keep Proper Documentation

For each sale, keep proof of:

• The customer’s billing and shipping address.

• Invoices showing applied taxes.

• Shipping or delivery confirmations.

• Contracts specifying service location.

These are essential to justify why certain invoices include (or exclude) QST or HST if audited.

Step 5 — Recordkeeping for Inter-Provincial Transactions

Your accounting system should have separate ledgers or tax codes for:

• QST collected.

• GST collected.

• HST collected (by rate).

Example tax setup in QuickBooks or Xero:

• QC – GST 5%, QST 9.975%

• ON – HST 13%

• NS/NB/PEI/NL – HST 15%

• AB/BC/SK/MB – GST 5% only
  This ensures automated calculation and clean reconciliation at filing time.

Common Mistakes to Avoid

• Charging QST to customers outside Quebec.

• Applying GST/HST based on your business location instead of customer location.

• Failing to register for GST before inter-provincial sales.

• Mixing QST and HST sales in the same report.

• Forgetting to keep delivery documentation for exports or out-of-province sales.

Learning Insight

Revenu Québec and CRA share data — if QST filings show lower revenue than CRA’s GST filings, both agencies may initiate a reconciliation audit.

Real Quebec Business Example

A Montreal e-commerce retailer sold goods across Canada but charged QST to Ontario buyers. After a Revenu Québec review, the business had to refund customers and refile four quarters of QST returns.

Another Quebec software developer correctly applied HST on Ontario sales, zero-rated exports to the U.S., and separated Quebec sales for QST filing — resulting in flawless audit compliance.

Lesson: For inter-provincial sales, destination determines tax — not origin.

Compliance Checklist

Do

• Register for GST and QST before selling inter-provincially.

• Apply the correct provincial tax rate based on customer location.

• File QST only on Quebec sales.

• File GST/HST on all Canadian sales.

• Keep invoices and shipping proof for each province.

Don’t

• Charge QST on out-of-province sales.

• Mix QST and HST in one return.

• Forget to reconcile provincial tax rates in your accounting software.

• Assume online sales are tax-exempt.

Mackisen Strategy

At Mackisen CPA Montreal, we help multi-province businesses stay fully compliant by:

1. Setting up accounting systems with correct tax codes for each province.

2. Preparing separate QST and GST/HST filings.

3. Handling inter-provincial reconciliation between CRA and Revenu Québec.

4. Providing audit-proof documentation and tax summaries.

We ensure your cross-province sales are accurately taxed, recorded, and reported — every time.

Why Mackisen

With over 35 years of combined CPA expertise, Mackisen CPA Montreal helps Quebec businesses expand confidently across Canada. From proper invoicing to inter-provincial filing, our team ensures 100% compliance and smooth integration between CRA and Revenu Québec systems.