Should I Separate GST and QST on Invoices?

For many Quebec businesses, especially freelancers, consultants, retailers, contractors, and online sellers, invoicing seems straightforward until GST and QST enter the picture. One of the most common questions business owners ask is: Do I need to show GST and QST separately on my invoices, or can I combine them? The answer is extremely important for compliance. Revenu Québec has strict invoicing rules, and failing to display taxes properly can result in denied input credits for your clients, rejected invoices, and audit issues.

This guide explains when and why you must separate GST and QST on invoices and what happens if you don’t.

Legal and Regulatory Framework

Invoicing rules for GST and QST are governed by:
• the Excise Tax Act (federal GST legislation)
• the Quebec Taxation Act (QST legislation)
• Revenu Québec invoice documentation requirements

These laws require businesses to:
• list GST and QST as separate line items
• include the GST number and QST number
• specify tax rates and tax amounts
• provide itemized descriptions of taxable supplies

A combined “taxes included” total is not sufficient unless specific disclosure rules are followed.

Why You Must Separate GST and QST on Invoices

1. Revenu Québec Requires It

To be considered a valid tax invoice, GST and QST must be broken down individually:
• GST (5%)
• QST (9.975%)

Each with its own amount and registration number.

2. Your Clients Need It to Claim Credits

If you invoice businesses:
• they cannot claim ITCs (GST credits)
• or ITRs (QST credits)
without separate tax amounts and tax numbers.

Incorrect invoices = denied credits.

3. Combined Tax Lines Cause Audit Problems

Auditors often deny ITCs/ITRs when invoices show:
• “tax included”
• “TAX 14.975%” without breakdown
• one combined tax line

They require clear, separate details.

4. Transparency and Accuracy

Separating taxes helps clients:
• understand what they’re paying
• verify compliance
• avoid disputes
• track taxes for their own filings

What Your Invoice MUST Include

A compliant GST/QST invoice must show:
• business legal name
• invoice date and number
• description of goods/services
• pre-tax amount
• GST amount (5%)
• QST amount (9.975%)
• GST registration number
• QST registration number
• total amount payable

Optional but recommended:
• client address
• payment terms
• PO reference numbers

What Happens If You Don’t Separate GST and QST?

1. Client Refunds or Payments May Be Delayed

Government and corporate clients often reject non-compliant invoices.

2. Clients May Lose Tax Credits

If they cannot claim ITCs/ITRs, they may ask you to reissue the invoice.

3. You Risk Revenu Québec Scrutiny

Incorrect invoicing is a common audit finding.

4. You May Need to Reissue Dozens or Hundreds of Invoices

Backdating corrections is time-consuming and may disrupt accounting records.

5. Legal Exposure

If you fail to disclose taxes properly, you could be accused of misrepresentation.

When Can Taxes Be Combined?

You may combine GST and QST only if:
• prices are tax-included,
• the invoice clearly states, “Taxes included”,
• and the invoice shows the breakdown of taxes somewhere on the document.

Example:
Price (taxes included): $100
GST included: $4.35
QST included: $8.69

These must still be itemized.

Best Practices for Perfect Invoices

• Use accounting software (QuickBooks, Xero, Wave, FreshBooks)
• Turn on tax-line separation in settings
• Save your invoice templates
• Review compliance annually
• Automate GST/QST calculations
• Store digital copies of sent invoices

Mackisen Strategy

Mackisen CPA helps businesses:
• create compliant invoice templates
• set up proper GST/QST codes in accounting software
• fix old incorrect invoices
• ensure clients can claim their credits
• prepare audit-ready invoicing systems

Our precise approach protects your business and your clients.

Real Client Experience

A consulting firm issued combined tax invoices for two years. Clients could not claim ITCs/ITRs. Mackisen rebuilt their templates and corrected past periods.

A retailer used tax-included pricing without the mandatory breakdown. Revenu Québec challenged their filings. Mackisen prepared the breakdowns and avoided adjustments.

An online seller used incorrect Shopify tax settings. Mackisen fixed configuration and prevented thousands in denied credits.

Common Questions

Is it illegal to combine GST/QST?
Not illegal but non-compliant unless the proper breakdown is included.

Do I need tax numbers on every invoice?
Yes for GST and QST.

Can I issue a corrected invoice?
Yes, at any time, and it is often required.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal ensures your invoicing is fully compliant, accurate, and audit-proof protecting both your business and your clients.