MY BUSINESS IS UNDER $30K – SHOULD I STILL REGISTER FOR GST/QST?

Many new Quebec entrepreneurs, freelancers, and small business owners deliberately keep their business revenues under the $30,000 threshold because they believe that staying below this limit avoids administrative obligations. While this is true the law does not require registration for GST/QST below $30,000 it is often financially beneficial to register voluntarily anyway. This guide explains when a business under $30,000 should still register for GST/QST, the advantages and disadvantages of voluntary registration, and the common mistakes small suppliers make.

Understanding voluntary registration helps new businesses make informed decisions that support compliance, profitability, and future growth.

LEGAL AND REGULATORY FRAMEWORK

Under the Excise Tax Act (GST) and the Quebec Taxation Act (QST):

• Businesses with less than $30,000 in worldwide taxable revenues over four consecutive quarters are considered small suppliers.
• Small suppliers are not required to register for GST/QST.
• Small suppliers may voluntarily register anytime to claim input tax credits (ITCs) and input tax refunds (ITRs).

Once a business voluntarily registers, it must comply fully with GST/QST rules as though it were mandatory.

KEY COURT DECISIONS

Courts have upheld that:

• small suppliers may register voluntarily
• once registered, compliance obligations become binding
• failure to charge GST/QST after registration results in tax owing
• ITCs/ITRs can only be claimed if the business is validly registered
• invoices without GST/QST numbers are non-compliant

These decisions confirm that voluntary registration is legally valid but requires consistent compliance.

WHY SMALL BUSINESSES HESITATE TO REGISTER

Entrepreneurs often avoid registration because they believe it will create:

• extra paperwork
• unnecessary tax collection
• customer resistance to pricing changes
• administrative burden
• fear of doing something “wrong”

In reality, modern accounting tools make GST/QST filing simple — and the benefits often outweigh the inconvenience.

SHOULD YOU REGISTER FOR GST/QST IF YOU ARE UNDER $30,000?

Here is a clear decision guide.

1. YES — Register voluntarily if you have significant business expenses

If you spend money on:

• software
• advertising
• rent
• subcontractors
• equipment
• supplies
• website development
• inventory

Then you can recover GST/QST on these expenses through ITCs/ITRs.
This puts money back into your business.

2. YES — Register if your clients are businesses (B2B)

Business clients can recover GST/QST themselves, so charging tax:

• does NOT increase your price to them
• increases your credibility
• ensures your invoices are compliant
• simplifies corporate relationships

B2B service providers almost always benefit from registration.

3. YES — Register if you expect to exceed $30,000 soon

Crossing the threshold unexpectedly triggers mandatory registration. Early voluntary registration prevents:

• missed tax collection
• retroactive filings
• penalties
• confusion with clients
• adjustments at year-end

If your business is growing quickly, register now.

4. YES — Register if you want to appear more professional

Registered businesses present:

• real tax numbers
• compliant invoices
• structured reporting
• greater legitimacy

This is especially important for consultants, designers, IT freelancers, and contractors.

5. NO — Avoid registration if you exclusively provide exempt services

If your business only supplies exempt services, such as:

• certain health services
• certain education or tutoring
• certain financial services

Then registration provides no benefit because you cannot claim ITCs and must not charge tax.

6. NO — Avoid registration if your customers are price-sensitive consumers

If your customers will resist price increases that include tax (e.g., beauty services, lessons, small consumer services), staying unregistered may be advantageous temporarily.

7. NO — Avoid registration if your business will remain small intentionally

For microbusinesses under $30,000 with minimal expenses, voluntary registration may not be beneficial.

ADVANTAGES OF VOLUNTARY GST/QST REGISTRATION

• Recover GST/QST paid on business expenses

This is the biggest financial advantage.

• Build credibility with clients

Business clients expect tax-number invoices.

• Avoid future registration surprises

You won’t have to rush when you cross the threshold.

• Eligible for input tax credits/refunds

Improves cash flow significantly for startups.

• Professional invoicing and compliance

Strengthens your business profile.

DISADVANTAGES OF VOLUNTARY REGISTRATION

• You must collect GST/QST on sales

This may impact some price-sensitive customers.

• You must file returns

Monthly, quarterly, or yearly returns become mandatory.

• You must maintain tax documentation

Receipts and invoices must be kept for six years.

• You must remit taxes even if clients don’t pay

This is important for unpaid invoices.

MACKISEN STRATEGY

Mackisen CPA helps small businesses determine whether voluntary registration makes financial and operational sense. We analyze projected revenues, expenses, client profiles, and cash flow impact. If voluntary registration is chosen, we complete the registration correctly, configure tax systems, and provide monthly or quarterly filing support.

We also help businesses undo common mistakes made by small suppliers who accidentally cross the threshold or charge tax incorrectly.

REAL CLIENT EXPERIENCE

A Montreal freelancer registered voluntarily and recovered over $2,800 in GST/QST during their first year.

An online seller crossed $30,000 mid-quarter without realizing it. Mackisen corrected their status and filed retroactive returns to avoid penalties.

A tutor providing exempt services avoided unnecessary tax obligations by confirming they did not need to register.

COMMON QUESTIONS

If I register voluntarily, can I cancel later?
Yes if your revenues consistently remain below $30,000.

Will registration hurt my pricing?
Not for B2B clients. For consumers, it depends on your market.

Can I claim ITCs for pre-registration expenses?
Usually no, unless very specific conditions are met.

Does voluntary registration trigger audits?
No. Voluntary registration is normal and often preferred.

WHY MACKISEN

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps entrepreneurs make the right decision about GST/QST registration. We protect your business, maximize credits, and ensure full compliance.