How to File Your First GST/QST Return as a New Entrepreneur

Introduction
Filing your first GST (Goods and Services Tax) and QST (Quebec Sales Tax) return as a new entrepreneur can feel intimidating. You’ve registered your business, started generating sales, and collected taxes now it’s time to remit them properly to the Canada Revenue Agency (CRA) and Revenu Québec (ARQ).

This first filing is one of the most critical milestones for any business. Errors in your initial GST/QST return can trigger red flags in government systems and lead to unnecessary audits or delays in refunds. At Mackisen CPA Montreal, we help new entrepreneurs file their first GST/QST return accurately, on time, and with full documentation. This guide explains everything you need to know — from calculating your remittance to setting up your online accounts and staying compliant for future periods.

Legal and Regulatory Framework
Your responsibility to collect and remit GST/QST is established by law:

• Excise Tax Act (Canada) s.225–s.228 — requires registrants to file GST/HST returns based on sales and Input Tax Credits (ITCs).

• Taxation Act (Quebec) s.407 — mandates QST registration and reporting for Quebec-based entrepreneurs.

• Tax Administration Act (Quebec) s.59(3) — imposes interest and penalties for late filings or payments.

• CRA and ARQ policies (P-148 / LAF.94-1) — provide relief for first-time filers acting in good faith.

As soon as you register for GST and QST, your filing obligations begin — even if you had no sales during the period.

Step-by-Step: How to File Your First GST/QST Return

1. Confirm Your Filing Frequency

   • CRA and Revenu Québec assign a filing frequency (monthly, quarterly, or annually) based on your expected revenues.

   • You can find this information in your CRA registration letter or in your Revenu Québec Mon Dossier account.

   • For most new small businesses, quarterly filing is standard.

2. Gather Your Records for the Period
   You will need:

   • Total sales (excluding GST/QST).

   • Total GST and QST collected on sales.

   • Total business expenses with GST/QST paid (for ITCs and ITRs).

   • Proof of payments, receipts, and invoices for all purchases.

   • Any adjustments (e.g., returned goods, credits, or write-offs).

3. Calculate Your Net Tax Owing or Refund

   • Net Tax = GST/QST Collected – ITCs/ITRs on Purchases.

   • If you collected more tax than you paid, you owe a remittance.

   • If you paid more tax on expenses than you collected, you’re entitled to a refund.

4. Log Into Your Online Accounts

   • CRA: Access your My Business Account (http://canada.ca/my-business-account).

   • Revenu Québec: Access Mon Dossier (http://revenuquebec.ca/mon-dossier).

   • Select “File a GST/HST return” and “File a QST return.”

   • Ensure you select the correct period (e.g., Q1: January–March).

5. Enter Your Sales and Tax Data

   • Line 101 (CRA): Total sales before tax.

   • Line 103: GST/HST collected or collectible.

   • Line 106: Input Tax Credits (GST paid on business expenses).

   • Line 109: Net tax payable (automatically calculated).

   • For QST, complete similar fields in your FPZ-500-V form in Mon Dossier.

6. Submit and Save Confirmation

   • Review all figures before submitting.

   • Submit your GST and QST returns online.

   • Download and save both confirmation receipts.

   • Record payment due or expected refund.

7. Remit Payment or Track Refunds

   • Pay electronically via online banking or CRA My Payment.

   • Refunds are typically deposited within 10–15 business days.

   • Always keep bank proof of payment or refund deposit.

Jurisprudence and Legal Insights
Canadian and Quebec courts have emphasized that first-time filers are responsible for full accuracy, even if inexperienced:

• Hickman Motors Ltd. v. Canada (SCC 1997) — CRA assessments are presumed correct until the taxpayer provides proof otherwise.

• Canderel Ltd. v. Canada (SCC 1998) — filings must reflect commercial reality, supported by records.

• Lac d’Amiante du Québec Ltée (SCC 2001) — Revenu Québec has full authority to verify and reassess GST/QST filings.

These rulings underscore that good faith alone is not enough your books must prove compliance.

Documentation: Building a Permanent Filing System
From your first filing, establish an audit-ready documentation process:

• Keep all invoices with supplier GST and QST numbers.

• Maintain a digital filing system with folders by month or quarter.

• Store receipts, bank statements, and credit card reports for six years.

• Create a filing summary sheet recording total sales, taxes collected, and ITCs/ITRs claimed.

• Keep CRA and ARQ confirmation numbers for each return.

At Mackisen CPA Montreal, we build automated filing folders for clients that sync with their accounting systems ensuring every transaction is categorized and compliant.

How CRA and Revenu Québec Audit New Businesses
New entrepreneurs are often reviewed during their first or second filing year. Auditors verify:

• Correct registration of GST and QST numbers.

• Accuracy of collected vs. remitted taxes.

• Validity of ITC/ITR claims (matching invoices and supplier numbers).

• Bank and accounting records consistency.

• Filing and payment timeliness.

A properly documented first return sets the tone for future compliance and credibility with both agencies.

Winning With CRA and Revenu Québec
At Mackisen CPA Montreal, we help new business owners file confidently and correctly:

1. Registration Review – We confirm your CRA and ARQ accounts are correctly set up.

2. Data Reconciliation – We reconcile your accounting software to ensure all transactions match.

3. Return Preparation – We calculate GST/QST, prepare filings, and review them line-by-line.

4. Electronic Submission – We file your first returns through CRA and Revenu Québec systems.

5. Audit Protection – We retain digital proof and handle any post-filing inquiries.

Mackisen Service Hub: Tax Confidence for New Entrepreneurs
Our Mackisen Service Hub supports first-time business owners with:

• GST/QST registration, filing, and remittance setup.

• Bookkeeping system integration (QuickBooks, Sage, Xero).

• Compliance training and quarterly filing reviews.

• Audit defense and penalty relief assistance.

Our bilingual team of CPA auditors, tax lawyers, and accounting specialists graduates of McGill, Université de Montréal, and Concordia University works side by side with entrepreneurs to build compliant, profitable businesses.

Real Client Example
A Montreal-based marketing consultant filed their first QST return late due to confusion about Revenu Québec’s portal. Mackisen CPA helped correct the filing, documented proof of good faith, and submitted a penalty relief application under Tax Administration Act s.94.1. Revenu Québec waived all penalties and interest, and the client has since filed five consecutive error-free returns.

Why Mackisen
With over 35 years of combined CPA and legal experience, Mackisen CPA Montreal ensures your first GST/QST filing is accurate, timely, and stress-free. We help you set up systems that make future filings automatic, transparent, and audit-ready.

When you file with Mackisen, you don’t just submit a return you establish a foundation of compliance and financial discipline that will support your business for years to come.