Multiple Late GST/QST Returns to File? How to Catch Up Fast

Falling behind on GST/HST and QST filings is more common than you think, but it’s also fixable with the right approach. This comprehensive guide – written in the style of a Big-4 advisory whitepaper – outlines why Quebec businesses must file all sales tax returns on time, the severe consequences of late GST/QST filing (penalties, interest, arbitrary assessments, director liability, audits, bank account freezes), and a proven CPA strategy to catch up quickly. We cover how to prioritize back filings, handle common challenges (like missing records or inability to pay), and provide tips to prevent future filing gaps. Mackisen CPA Montreal explains step-by-step how to regain compliance fast and why we’re a trusted partner for late GST/QST filing recovery, audit support, and director protection.

Legal Requirement: Filing All GST/HST & QST Returns On Time

Every GST/HST and QST registrant in Canada is legally required to file a return for each reporting period by the deadline, even if no tax is owed. This obligation is codified in the Excise Tax Act (federal GST/HST law) and Quebec’s Tax Administration Act (Loi sur l’administration fiscale, which governs QST enforcement). In practice, once you register for GST/QST, you must submit returns on a fixed schedule – monthly, quarterly, or annual – as assigned based on your sales volume. For example, monthly filers must remit returns by the end of the following month, quarterly filers one month after quarter-end, and annual filers three months after fiscal year-end. There are no exceptions for inactivity: even a nil return (no sales or no net tax) must be filed on time.

Failing to file on time violates the tax law and immediately exposes the business to penalties and interest. The CRA and Revenu Québec do not send routine reminders of due dates – it’s the taxpayer’s duty to track deadlines and comply. In short, on-time GST/QST compliance isn’t optional: it’s a legal requirement for doing business in Quebec and Canada, enforced strictly to ensure the integrity of tax collection.

Consequences of Late Filing: Penalties, Interest & Director Liability

Missing one or more GST/HST or QST return deadlines triggers a cascade of consequences under the law. Both the Canada Revenue Agency (CRA) and Revenu Québec impose late-filing penalties when a return is filed past its due date and a balance was owing. For Revenu Québec, the standard penalty is 5% of the tax owing, plus 1% per month late (up to 12 months). For example, filing a return 3 months late with $10,000 owing would incur a $800 penalty (5% base = $500, plus 3% monthly = $300). The CRA’s formula is similar: 1% of the unpaid amount + 0.25% of it per full month overdue (max 12 months) – effectively a 5% initial penalty plus 1% each month up to 12%. These penalties double for repeat late filers: if another return was late in the past 2–4 years, the base penalty can jump to 10% plus 2% per month (up to 20 months). In other words, habitual non-compliance can lead to a massive 20% penalty on the tax owing for each late return.

On top of penalties, interest charges accrue daily on any unpaid GST/QST from the day after the due date until payment is made. The interest rate is prescribed quarterly and is currently in the range of 8–10% annually, compounded daily – a substantial cost for late remittances. Importantly, interest is charged in addition to the late-filing penalties; it also applies to penalties themselves if they remain unpaid. This means a snowball effect: a business that files late and can’t pay immediately will incur both a penalty and mounting interest on the outstanding tax and penalty balance.

Difference: Late Filing vs. Late Payment. It’s critical to understand the distinction between filing a return late and remitting payment late. A late-filed return (submission past the deadline) triggers the penalties described above (5% + 1%/month) if there was an amount owing. Conversely, a late remittance (paying the tax due after the deadline) generally does not incur the 5% penalty as long as the return itself was filed on time – however, interest will still accrue on the late payment. In short, filing on time, even without full payment, avoids the punitive late-filing penalty. Tax authorities encourage this: they prefer you file the return and then arrange a payment plan for the balance, rather than not filing at all. Not filing is viewed as a more serious offence than filing and paying late. So, even if you can’t pay immediately, always file the return to limit charges to just interest, and deal with payment separately (more on payment arrangements below).

Estimated (“Arbitrary”) Assessments. When returns are significantly late or unfiled, the CRA and Revenu Québec have the power to issue an estimated assessment for the period. Under Excise Tax Act §299(1) and equivalent Quebec provisions, they can essentially “guess” your tax owing based on available data and assess it against you. These arbitrary assessments are generally much higher than actual, because they give no credit for input tax credits/refunds or deductions you’re entitled to. It’s a built-in punitive measure for non-filers. For instance, CRA’s Non-Filer Program might use prior-year revenues or third-party information (like sales reported on T4/T5 slips, industry norms, or bank deposits) to calculate a notional GST/HST liability and send you a Notice of Assessment. This can be shocking: many businesses open such assessments to find an exaggerated tax bill that doesn’t reflect their real net tax after credits. While you can later correct an arbitrary assessment by filing the actual return (and possibly objecting to the assessment), it creates immediate problems – you’ll be charged interest on the assessed amount and potentially face enforcement on it. Moreover, an arbitrary assessment does not erase the requirement to file the return and is not a defense against “failure to file” penalties or prosecution. It’s basically the agencies saying, “If you won’t file, we’ll file something for you (in our favour).” Thus, multiple missed returns often lead to these painful estimated assessments.

Personal Director Liability. One of the gravest risks of unremitted GST/QST is that corporate directors can be held personally liable for the tax debts. GST and QST are considered trust funds (collected from customers), so if a corporation fails to remit these taxes, the CRA and Revenu Québec can pursue the directors personally under director liability provisions. That means your personal assets, wages, and bank accounts are at risk – the corporate veil won’t protect you. Directors can be personally assessed for the unpaid GST/HST, QST, and related interest or penalties, provided certain conditions are met (e.g. they were a director during the period of non-remittance and the tax agency made reasonable collection attempts against the company). There is a statutory two-year limitation after a director’s resignation, but many owner-managers never formally resign, making them perpetually liable. In short, if you have multiple unfiled/ unpaid GST/QST returns, you as a director could eventually receive a CRA or ARQ assessment in your own name for those amounts. This elevates the issue from a corporate problem to a personal financial crisis. (Note: Corporate income tax debts don’t trigger director liability, but GST/QST and payroll do.) The sooner you catch up and remit the sales taxes, the less likely authorities will invoke director liability as a collection tool.

Late Filing as an Audit Red Flag. Habitual late filing or non-filing of GST/QST returns raises audit red flags. Even one missed filing can put your account under closer monitoring. Tax authorities reason that if a business isn’t meeting basic compliance, there may be underlying issues (underreported sales, inaccurate bookkeeping, cash skimming, etc.). Multiple missed returns especially suggest possible unreported revenues – a classic audit trigger. CRA and Revenu Québec may choose to audit your sales records once you do file late returns, to verify the accuracy (since chronic lateness lowers their trust in your accounting). They may also expand the audit to income tax or other areas if discrepancies are found. In sum, chronic lateness not only incurs penalties but also increases the likelihood of a full audit, which can uncover further problems.

Enforcement Actions: The longer returns go unfiled, the more aggressive the agencies become. After sending a demand to file letter (or arbitrary assessing you), they can initiate collection enforcement even without a court order. For instance, CRA and ARQ can issue a Requirement to Pay to your bank or accounts receivable – this legal notice effectively freezes your bank account and directs the bank to send them whatever funds are in it (up to the amount owing). They can similarly garnish other income sources (e.g. accounts receivable from clients, or intercept government payments due to you). Revenu Québec is known to act quickly – they may freeze accounts or seize assets if several sales tax periods are outstanding, especially if large sums are estimated owed. Additionally, the agencies will withhold any tax refunds or credits (GST credits, income tax refunds) you’re entitled to, to offset your debt. If still unaddressed, liens can be placed on property or, in extreme cases, legal prosecution for failure to file can be pursued (fines or jail in rare egregious cases). In short, ignoring multiple GST/QST filings is not a static situation – it escalates. Initially you’ll see penalty/interest letters, then warning notices, then potentially your business bank account frozen and operations crippled as the government moves to secure the tax it believes it’s owed. This is why taking prompt action to catch up is critical – to stop the snowballing consequences and regain control before enforcement goes too far.

Multiple Missed Returns? Expect Audits and Extreme Measures

If you have several GST/HST or QST returns outstanding, be prepared for heightened scrutiny. As noted, multiple missed filings are practically a neon sign for auditors. The tax authorities may suspect the business has been using collected tax funds for cashflow (essentially, “borrowing” tax money) or understating revenues. Common audit triggers in this scenario include: large jumps in tax liability once you file (indicating prior underreporting), consistent late filing patterns, or discrepancies between your sales tax filings and income tax filings or third-party info. The agencies’ computer systems cross-match data; for example, a GST return reporting $1 million of sales while income tax shows $2 million of sales would draw attention, as would consecutive periods of “nil” returns followed by high amounts. Missing multiple returns can also trigger a net worth audit (especially if they suspect unreported cash sales). In essence, by not filing, you invite the government to question what you’re hiding – and they will likely look for answers via audit.

In addition, with multiple unfiled returns, you may face compounded enforcement: not just one bank freeze, but possibly repeated actions for each assessed period, or broader legal actions. Revenu Québec, for instance, might suspend your tax account or cancel your registration until compliance is restored – meaning you legally can’t charge GST/QST, which has business ramifications. They might also require a security deposit from chronic late-filers as a condition to re-open the account. CRA’s non-filer program, as reported in late 2025, began freezing bank accounts of businesses with as few as two major return gaps (e.g. two years of unfiled returns) and gave final deadlines to comply. This shows the current environment: post-pandemic, tax authorities are cracking down on non-compliance aggressively, using freezes and notional assessments on a large scale. Benefit and credit holdbacks are another tactic – your business and even personal tax credits can be offset. Directors and owners of businesses with multiple missed GST/QST returns have even had their personal wages garnished or tax refunds seized once director liability assessments hit.

Bottom line: Multiple late GST/QST returns create a compounding risk of severe actions – audits, arbitrary tax bills, and enforced collections – that can threaten your business’s survival. However, if you act fast and strategically, you can mitigate these outcomes. The next section details exactly how to catch up and get back into compliance before matters worsen.

How to Catch Up Fast: Mackisen’s Proven 5-Step Strategy

Catching up on numerous late returns may seem daunting, but a methodical approach can restore full compliance faster than you think. Mackisen CPA’s team has extensive experience helping Montreal businesses clean up backlogs of GST/QST filings. Our strategy to catch up quickly involves five key steps:

Step 1 – Gather All Documents & Records (Information Gathering). Start by collecting every piece of financial data for the periods you missed. This includes sales records (invoices, receipts, point-of-sale reports), purchase invoices (for expenses and input tax credits), bank statements, credit card statements, online payment processor reports (e.g. PayPal, Stripe), and prior notices/letters from CRA or Revenu Québec. If records are missing, get duplicates from suppliers or customers where possible – for example, reprint lost invoices or request statements from vendors (this will help support your input tax refund claims). Don’t forget any correspondence from the tax agencies; a notice of assessment or warning letter will tell you which periods are outstanding or arbitrarily assessed. Essentially, you want to rebuild the paper trail for each unfiled period. Good record-gathering is the foundation for accurate returns. (If your bookkeeping was neglected, this may mean assembling months of transactions from scratch – which is doable with bank feeds and some sleuthing.)

Step 2 – Reconstruct Bookkeeping & Calculate Tax for Each Period. Using the gathered data, perform retroactive bookkeeping for the missing periods. This means entering all those transactions into an accounting system (or spreadsheets) period by period. Mackisen CPA often performs a full bookkeeping reconstruction: we download all bank and credit card data and categorize every transaction properly. Key tasks include separating business vs personal expenses (if accounts were comingled), matching sales deposits to invoices (to ensure all sales are counted), and identifying all GST/QST collected and paid. We also fix any accounting errors that contributed to the problem – for instance, if your books had the wrong tax rates or missed some taxable sales. In one case, we discovered incorrect GST/QST codes in the client’s software and duplicate entries that overstated some liabilities. By cleaning these up, we avoided filing incorrect returns. The goal of Step 2 is to produce accurate financial statements and tax calculations for each period. This includes computing the GST/HST and QST you collected and the input tax credits/refunds (ITCs/ITRs) you can claim, so you know the net tax for each return. If some receipts are missing and cannot be obtained, a CPA will use reasonable estimates or alternate documentation – it’s better to file an estimated claim (with notation) than to omit legitimate credits entirely. By the end of this step, you should have the numbers needed to fill out each overdue GST/QST return.

Step 3 – Correct Past Errors and Adjust as Needed. As you work through the books, identify any past filings that were incorrect. Sometimes late filers also misfiled earlier periods. If, for example, you find that a filed return from two years ago missed claiming some ITCs (perhaps due to a late invoice found now), prepare an adjustment for that period as well. It’s important to address errors holistically so that your cumulative tax reporting is accurate – this can prevent audits down the line. Mackisen’s process often involves preparing adjusted GST/QST returns for prior periods in parallel with the late returns, especially if errors in accounting led to the compliance gap. Additionally, ensure you apply the correct tax rules (GST 5%, QST 9.975% on most items, or zero-rated/exempt where appropriate) consistently; we often recode transactions that were taxed incorrectly. All these corrections should be documented. Revenu Québec allows you to amend past returns (within statute timeframes) and it’s best to file adjustments together with the late returns to demonstrate good-faith clean-up. This step is about getting your tax ledger 100% accurate before submitting anything.

Step 4 – File All Outstanding GST/HST & QST Returns Promptly. Now comes the execution: electronically file each of the missing returns (and any adjusted ones) via your CRA and Revenu Québec online accounts. If there are many periods, you can submit them in rapid succession (e.g. multiple monthly/quarterly filings). It’s generally wise to file the oldest periods first and move forward chronologically. In fact, the CRA often requires the oldest year to be filed first, and it avoids complications with carry-forwards or ITC timing by keeping order. By filing all returns, you formally disclose the true tax owed for each period, replacing any arbitrary assessments. Make sure to include all required schedules or information in the returns (for example, if some of those periods were nil, explicitly file a nil return to clear the record). After filing, note the reference numbers or confirmations for each submission and keep copies of the filed returns. If any return shows a refund (e.g. some periods might have had more input tax credits than collected tax), those refunds can offset amounts owing in other periods or be claimed – but be aware that Revenu Québec may withhold paying refunds until all compliance is up to date. Filing everything also establishes a clear chronological record that you are now compliant through those dates.

Step 5 – Proactive Communication and Enforcement Relief. Throughout the catch-up process, it’s vital to proactively communicate with the tax authorities. Don’t wait for them to chase you. Mackisen CPA routinely contacts Revenu Québec and CRA on behalf of clients to manage the situation. For example, if you’ve received warning letters or a freeze notice, we notify the agency that the taxpayer is now working to comply. Often, we can request a hold on collections while the returns are being prepared – tax agents may grant a short grace period once they know filings are imminent. By responding to every notice and showing proof that filings are in progress, you prevent further enforcement like arbitrary assessments or legal actions. In one case, our quick communication stopped Revenu Québec from issuing an estimated assessment for a missing period, saving the client from a hefty bogus bill. We also negotiated release of a bank account freeze once we provided copies of the just-filed returns and a payment arrangement plan. The key is demonstrating good faith: tax authorities are more reasonable when they see the taxpayer taking concrete steps to fix the non-compliance. If needed, this step also includes negotiating a payment plan for the amounts owed. Both CRA and ARQ have programs to arrange installment payments or a short-term extension for paying a large debt. We’ll typically present a proposal (based on your cash flow) to pay the arrears over e.g. 6–12 months. Getting a payment agreement in place will usually halt further enforcement – as long as you abide by it. Finally, consider if you qualify for the Voluntary Disclosures Program (VDP). If your late filings meet the criteria (completely voluntary, no prior contact from CRA/ARQ about them, and more than a year overdue), a VDP application could waive penalties and some interest. This is a complex process requiring full disclosure, but Mackisen’s tax lawyers can prepare a VDP submission if appropriate. In any case, by completing Step 5, you stabilize the situation: all returns filed, enforcement stopped, and a clear path to paying off the tax debt (or getting refunds) established.

Following these steps, a once non-compliant business can swiftly transform into one that is fully caught up and audit-ready. For example, in a recent success story, a Montreal entrepreneur had several years of GST/QST returns unfiled, missing records, and mounting notices. Mackisen reconstructed their books, filed every period, and not only caught them up but even recovered GST refunds they were owed – with all late penalties waived due to proactive compliance. The owner went from panicked to “fully in control” by the end. This illustrates that no matter how many returns you’ve missed, with expert help, full compliance recovery is achievable.

Which Periods to File First (Prioritizing Your Backlog)

When you’re behind on multiple reporting periods, a common question is: in what order should I tackle the filings? The general best practice is to start with the oldest outstanding period and work forward chronologically. There are several reasons for this:

• Chronological Accuracy: GST/QST returns often build on one another in terms of input tax credits. You can only claim input credits for expenses in the period they belong (or carry them forward if missed), and certain adjustments must be applied by the filing deadline of the next return. By doing the oldest return first, you establish the opening balances correctly for subsequent periods. It creates a clean timeline of tax reporting.

• Agency Requirements: The CRA typically demands the oldest unfiled year be filed first. Revenu Québec similarly prefers chronological filing. If you were to submit a later period but not earlier ones, the systems may flag it or hold it in processing. Clearing the oldest due period first also stops automated collections in their sequence – often the system won’t consider you compliant until all prior periods are filed.

• Statute of Limitations and Credits: GST/HST input tax credits generally have a time limit (e.g. 4 years for most registrants to claim ITCs). QST input refunds are similarly time-limited. If you have very old unfiled periods (over 4 years), you risk losing the right to claim those credits unless you file ASAP. By prioritizing older periods, you maximize the chance to claim all eligible credits and refunds before deadlines expire. Additionally, interest relief or penalty waiver applications are often more sympathetic for older years if you address them first rather than letting them linger.

• Avoiding compounding interest: The longer a period goes unfiled/unpaid, the more interest accrues. Tackling the oldest debt first can slightly reduce the growth of interest on that portion (though you’ll ultimately need to pay all, paying earlier stops further interest on that part).

That said, if there is an immediate enforcement threat on a particular period (for example, you got a final notice for last quarter’s GST), you might address that return first out of order to avert action. In most cases, however, you will be filing all missing periods in one concerted effort, so sequence is less about delay and more about logical process. A practical tip: If bookkeeping for all periods is too much to finish at once, file at least something to CRA/RQ for each period (even if estimated) to get placeholder filings in, then adjust later. This can stop the clock on failure-to-file penalties. But be careful – a poor estimate could trigger other issues, so it’s best done under professional guidance.

In summary, plan to file everything, and do it in order. It demonstrates to the tax authorities that you’re systematically cleaning house. By the time you submit the most recent return, all prior periods should be on record as filed – putting you officially “back in the system” as compliant.

Avoiding Future Filing Gaps: Compliance Tips

Catching up is half the battle; staying on track is the other half. Once you’ve cleaned up your GST/QST backlog, implement these best practices to prevent future late filings:

• Mark Your Calendar & Set Alerts: Create a compliance calendar with all GST/HST and QST due dates. For example, if you file quarterly, mark the last day of the month after each quarter as “GST/QST deadline.” Set reminder alerts 1-2 weeks before the due date and again a couple of days before. Many businesses use digital calendars or task management apps for this. Don’t rely on memory – systematize it.

• Maintain Real-Time Bookkeeping: Timely filings require up-to-date records. Aim to record your sales and expenses monthly (if not weekly) so that when a period ends, the data is essentially ready to summarize. Using accounting software (QuickBooks, Xero, etc.) with bank feeds can automate a lot of this. Reconcile your bank and credit accounts regularly. If everything is in order before the deadline, preparing the return is far less stressful.

• Delegate or Outsource if Needed: If tax compliance isn’t your strong suit, consider delegating it. Engage a CPA or bookkeeper to handle GST/QST filings. For instance, Mackisen CPA offers services to monitor your deadlines, prepare the returns, and even submit them on your behalf (with your authorization). This kind of professional oversight dramatically reduces the chance of missing a deadline – our clients often see a 90% reduction in late filings. The cost of outsourcing is trivial compared to penalties you’d incur for being late.

• File Even if You Can’t Pay in Full: This is worth repeating – never hold off filing a return because you’re short on cash to pay the remittance. Submit the return on time regardless, and pay what you can. Both CRA and Revenu Québec are open to payment arrangements, but they are far less forgiving of late filings. Filing on time demonstrates good faith and avoids the nasty late-filing penalties. You can then negotiate a payment plan for the balance; as long as you communicate and follow through, you’ll avert most punitive actions.

• Use Technology to Your Advantage: Enroll in online services like CRA My Business Account and Revenu Québec’s Mon Dossier. These platforms often show upcoming due dates and allow you to file and pay electronically (which is now mandatory for most registrantsrevenuquebec.ca). You can also use accounting software to generate tax reports each period. Some software can even be set to email you reminders or automatically draft returns. Automation reduces the reliance on last-minute manual effort.

• Keep Supporting Documents Organized: Retain all invoices, receipts, and tax working papers for at least six years (statutory record period). If an audit comes (and remember, after past issues you’re more likely to be audited), having organized records will make it far easier to defend your filings. Keep digital copies if possible, categorized by period. This also means that if a slip-up happens and a return is filed late, you can quickly respond to any inquiries with the proper documents at hand.

• Monitor Your Compliance Status: Periodically log into your CRA/RQ accounts to ensure all filings show as received and processed. Sometimes, a filed return might be flagged or not processed correctly – catching that early is key. Also, open and read every letter from the tax agencies. Early notices of an issue (like a missing return) allow you to fix it before it escalates.

By implementing these measures, you greatly reduce the risk of falling behind again. In essence, treat GST/QST compliance as a routine part of your business operations – not an afterthought. Many successful businesses schedule a “tax day” each month or quarter to review and file their returns as regularly as payroll. With discipline and/or professional support, you can ensure late GST/QST filings become a thing of the past.

Common Questions from Clients with Late GST/QST Returns

Late filings can be stressful, and it’s natural to have many concerns. Here are answers to some frequent questions Quebec business owners ask when catching up on GST/HST and QST returns:

Q1: “What if I don’t know my exact numbers or lost some receipts?”
A: You should still file something – use the records you do have to reconstruct the figures as best as possible. A CPA can help rebuild your sales and expenses from bank statements, sales logs, and other sources. Invoices or receipts lost? Often duplicates can be obtained from vendors, or you can use alternate evidence (e.g. contracts, emails, inventory records). If necessary, file an estimated return to meet the deadline, then file an adjustment later when the exact data is available. It’s better to file an imperfect return than none at all. Revenu Québec’s systems will at least stop automatic penalties once a filing (even $0 or estimated) is on record. Just be prepared to support any figures upon audit, and correct them proactively if new information comes in. Mackisen CPA frequently performs retroactive bookkeeping to derive accurate numbers for unfiled periods – it’s a routine part of our catch-up process. In short, not knowing the numbers is not an excuse for not filing – we can help you figure them out.

Q2: “What if I can’t pay the amount owing right now?”
A: Still file the returns on time (or now, if already late). Filing and paying are treated separately by the tax authorities. By filing, you avoid late-filing penalties, and you show compliance. For the amount owing, you have options: you can arrange a payment plan with CRA and Revenu Québec after the filing is processed. Typically, they’ll ask you to propose a monthly installment amount. As long as it’s reasonable and pays the debt over a year or two, they often accept. During COVID, for example, CRA was allowing flexible payment arrangements. Even outside of special periods, they prefer a voluntary payment plan over taking enforcement action. Keep in mind interest will continue to accrue on the unpaid balance (until fully paid), but penalties won’t increase if returns are filed. If the tax debt is extremely large and you truly cannot pay, you might consider financing (bank loan) or, as a last resort, taxpayer relief provisions or insolvency options – but those are complex and case-specific. The key takeaway: never delay filing because of inability to pay. In fact, both agencies explicitly advise filing on time and then dealing with payment after. They will not waive penalties just because you couldn’t pay, but they might waive them (or interest) if you at least filed and then encountered hardship (through a Taxpayer Relief request). Also, note that if you don’t file, they consider it possible tax evasion; if you file but don’t pay, it’s treated as a debt – a big difference in tone.

Q3: “Will I get penalized for all those late returns? Can penalties be reduced?”
A: By law, each late-filed return with a balance due will incur a penalty. So if you have, say, 4 quarterly returns late and each had tax owing, you face 4 separate penalties. However, if you come forward voluntarily before they issue a demand or assessment, you may avoid some of the harshest penalties. For instance, if you haven’t been caught yet, a Voluntary Disclosure Program (VDP) application could eliminate all late-filing penalties and even reduce interest by 50–75% in some cases. Even outside VDP, Mackisen has seen cases where, after full compliance, we successfully requested the agencies to cancel penalties on a one-time compassionate basis (using taxpayer relief provisions) – e.g. if there were extenuating circumstances like illness or calamity. The chances of penalty relief are highest when: (a) you initiated the correction (not the tax office chasing you), (b) you have a good explanation for why filings were missed, and (c) you have a clean record otherwise. It’s not guaranteed, but we assist clients in filing Taxpayer Relief applications citing reasonable cause once all returns are in. The official line: penalties are legislated and generally apply, but proactive compliance and a good track record can prompt the government to waive or reduce them as a gesture of good will. The worst-case scenario if penalties stand is that you might have to pay 5%+ of each period’s tax – which, while painful, is still preferable to the 10% or 20% if you continued to ignore the issue.

Q4: “What if my records show I actually should get a refund in some periods? Can I still claim refunds when I’m behind?”
A: Yes, you can. If your calculation for an unfiled period shows a net tax credit (refund) – for example, perhaps you had low sales and high input purchases that quarter – you should file for that refund. Both CRA and Revenu Québec will process it, but be aware they might hold the refund to apply against any other outstanding balances or simply hold it until all older returns are filed. In our experience, Revenu Québec tends to freeze refunds if you have any missing returns, as leverage. Once you file everything, those refunds can be released or used to offset later period debts. One caution: there are time limits to claim refunds. For GST/HST, if you delay too long, you might lose the ability to claim certain ITCs (usually 4 years). For QST, a similar prescription period exists. So, catching up sooner preserves your refund rights. In the Mackisen success case, our client ended up receiving several quarters of refunds once we filed all the late returns – money they desperately needed for cash flow. In summary, yes, you can get your refunds, but you must file to claim them, and it’s best to do it before time limits expire. Expect extra scrutiny on refund claims when you’ve been non-compliant (they often verify supporting documents before paying out refunds to late filers), but if it’s legitimate, you will get it.

Q5: “If I fix everything, will CRA/Revenu Québec leave me alone afterwards?”
A: Generally, coming into full compliance will reset your relationship with the tax authorities to normal footing – but with a bit of lingering caution on their side. After you catch up, you should expect possibly a follow-up audit or review. It’s common for the agencies to review one or two of the newly filed late returns in detail (they might ask for copies of invoices, etc.) to ensure accuracy. If you worked with a CPA and kept documentation, this is routine and nothing to fear. Once they verify and are satisfied, and you’ve arranged to pay any amounts due, you’ll be back to the regular cycle. You might be on an unofficial “watch list” for a couple of years where if you’re late again the response will be swifter. But many of our clients who cleaned up never face audits – especially if the amounts involved were small or resulted in net refunds. The key is to stay compliant going forward (see the tips above). One missed return after a cleanup could reignite enforcement quickly. On the bright side, by resolving all past issues, you avoid compounding problems and significantly reduce the risk of severe actions like director liability or account freezes in future. So yes, they’ll “leave you alone” in the sense of no longer chasing unfiled returns or estimated amounts. Just don’t give them a reason to come back. Over time (a few on-time filing cycles), you’ll just be another normal taxpayer in their eyes. We’ve had clients go from near-disaster to completely routine compliance and never hear a peep from CRA/RQ again except standard notices. That peace of mind is priceless.

Each situation has its nuances, so don’t hesitate to consult a professional for your specific questions. It’s better to ask and understand your options than to make an assumption that could lead to further trouble.

Why Mackisen CPA is the Trusted Choice for Late GST/QST Filing Recovery

Navigating multiple late GST/QST returns is complex and high-stakes – which is why many Quebec businesses turn to Mackisen CPA Montreal for help. Our firm combines 35+ years of CPA experience with specialized expertise in tax compliance, audit defense, and accounting cleanup. We’re not just bookkeepers who tally numbers; we are advisors and advocates who guide you through the entire recovery process and stand by you in front of the tax authorities.

Here’s what sets Mackisen apart in resolving late filing situations:

• All-in-One Solution: Mackisen is a full-service firm with CPAs, ex-auditors, and tax lawyers under one roof. This means we can handle every aspect of your case – from reconstructing your ledgers and preparing back returns, to negotiating with CRA/Revenu Québec, to mounting a defense in case of audits or director liability actions. Rather than juggling an accountant for filings and a lawyer for disputes, you get a coordinated team that addresses the issue holistically.

• Proven Recovery Process: Our step-by-step strategy (as outlined above) has been honed on numerous cases. We have taken clients from having boxes of unsorted receipts and years of unfiled returns to being fully caught up and even receiving refunds. We know the common pitfalls (e.g. missing ITCs, mis-classified sales, prior errors) and how to correct them thoroughly. Our meticulous approach ensures that once filings are done, your accounts are truly clean – ready for any audit. The fact that clients avoid penalties or pass audits after our work is a testament to doing it right, not just fast.

• Aggressive Tax Agency Negotiation: Mackisen doesn’t just prep documents; we actively engage with tax officials on your behalf. Because we understand CRA and ARQ procedures, we can often get collections officers to hold off or auditors to extend deadlines. Our team speaks their language. For example, we know how to draft a convincing letter to request penalty cancellation or taxpayer relief, citing the exact criteria that officials look for. We have successfully protected directors by proving due diligence or invoking the two-year rule when CRA attempted personal assessments. Simply put, we fight for our clients’ interests and have a track record of securing favorable outcomes (reduced penalties, halted garnishments, etc.) that a taxpayer alone might struggle to achieve.

• Director Liability Protection: If you’re a director worried about personal exposure (and you should be if GST/QST was unremitted), Mackisen offers expertise in director liability defense. We ensure that by swiftly addressing the filings and payments, and documenting your proactive steps, you’ll have a strong position if CRA or RQ ever attempt to assess you personally. In several cases, we’ve completely prevented director liability assessments by negotiating corporate payment solutions before the CRA pulled the trigger. Should a director liability claim arise, our team can respond with due diligence defenses and handle the objection or appeal, protecting your personal assets. This integrated approach shields both the company and its principals.

• Local Quebec and National Insight: Based in Montreal, we are intimately familiar with Revenu Québec’s processes and the nuances of QST (which differ from GST in administration). We also deal with the CRA daily. This dual proficiency is crucial in Quebec, where businesses must answer to two tax bodies. Mackisen ensures that GST and QST issues are resolved in tandem – for instance, we know that a late GST filing will alert Revenu Québec, so we preempt that by coordinating both. Our bilingual team can communicate seamlessly with provincial agents in French and federal agents in English, ensuring nothing is lost in translation. Few firms offer this level of synchronized GST/QST expertise.

• Confidential and Empathetic Service: We understand that coming forward about unfiled returns is stressful. Our professionals handle your case with strict confidentiality and a non-judgmental approach. Many of us have seen every scenario – from businesses who didn’t know they needed to register, to those who fell behind due to personal crises. Our goal is to solve the problem, not lecture you on it. Clients often tell us they felt a weight lifted after our first meeting, once they realized there is a clear plan to fix the situation and someone experienced in their corner. We also work discretely; if needed, we communicate with authorities in a way that minimizes red flags while still rectifying matters.

• Future-Focused Guidance: Our job isn’t done when the last return is filed. We debrief with clients on why the lapse happened and put safeguards in place to prevent recurrence. Whether it’s setting up a better bookkeeping system, training your staff on tax rules, or scheduling periodic compliance check-ins, Mackisen helps you build a sustainable compliance practice. We essentially “rehabilitate” your GST/QST habits so you don’t end up in the same predicament. And if you ever do face an audit related to the late periods, we’re already familiar with your case and can represent you smoothly, having built a solid, defensible filing position.

At the end of the day, Mackisen CPA Montreal is trusted by businesses for turning around even the messiest GST/QST situations because we deliver results. We blend technical tax know-how, practical accounting skill, and tenacious advocacy to resolve late filings fast and fully. Our success stories – companies that avoided $10,000+ in penalties, reclaimed overpaid taxes, or kept their directors out of legal trouble – speak to the value of having the right advisor in a crisis. We take pride in not just getting you compliant, but strengthening your overall tax compliance for the future.

Final Thought

Late GST and QST filings can spiral into serious financial and legal problems if left unaddressed. But no matter how behind you are, there is a path to get back on track. It requires urgency, attention to detail, and often professional help – but the sooner you act, the faster penalties stop and normalcy returns. Quebec’s business community is built on entrepreneurs taking bold steps; recognizing and fixing a compliance gap is just another step to safeguard what you’ve built.

If you have multiple late GST/QST returns to file, consider reaching out to the experts who have done it before. With the right strategy, you can catch up fast, minimize the damage, and focus on your business growth again. Mackisen CPA is here to guide you every step of the way, from chaos to compliance, with as little pain as possible. Your goal is our goal: a clean slate and peace of mind knowing that your GST/QST obligations are fully met – and will stay that way.