Insights
Nov 12, 2025
Mackisen
Small Business Sales Tax Compliance Checklist (Quebec Edition) — Montreal CPA Firm Near You
Introduction
For small businesses in Quebec, staying compliant with GST (Goods and Services Tax) and QST (Quebec Sales Tax) is essential to avoid penalties, reassessments, and cash flow issues. Whether you’re running a retail shop, a consulting firm, or an online store, proper sales tax management ensures your company remains profitable and legally protected.
At Mackisen CPA Montreal, we’ve designed this Quebec Sales Tax Compliance Checklist to help small businesses simplify their filing process and prevent costly mistakes. This step-by-step guide outlines everything you need to do — from registration to recordkeeping — to stay fully compliant with Revenu Québec (ARQ) and the Canada Revenue Agency (CRA).
1. Registration Compliance
Determine your registration requirement:
Register for both GST and QST once your total taxable revenues exceed $30,000 in the past 12 months.
You may register voluntarily before reaching this threshold to claim Input Tax Credits (ITCs) and Input Tax Refunds (ITRs).
Apply for both numbers:
GST registration: CRA Business Number (BN) – e.g., 123456789RT0001.
QST registration: Revenu Québec – e.g., TQ1234567890.
Display your registration numbers on all invoices and receipts.
Mackisen Tip: Keep your GST and QST registrations under the same legal entity for streamlined reporting.
2. Tax Rate Accuracy
Apply the correct rates:
GST: 5% (federal).
QST: 9.975% (provincial, calculated on the GST-inclusive price).
Check exempt or zero-rated sales:
Exempt (no tax charged, no ITCs/ITRs): residential rent, financial services, insurance, etc.
Zero-rated (0% tax, ITCs/ITRs allowed): exports, basic groceries, prescription drugs.
Verify e-commerce sales:
For Quebec consumers, ensure QST applies to online sales and subscriptions as per Revenu Québec’s 2019 digital tax rules.
3. Invoicing Requirements
Include the following on every invoice:
Legal business name and address.
Date and invoice number.
Customer name and description of goods/services.
Subtotal (before taxes).
GST and QST listed separately.
Your GST and QST registration numbers.
Total amount payable.
Use compliant software (QuickBooks, Sage, Xero) to automate tax calculations and generate compliant invoices.
4. Recordkeeping and Documentation
Maintain organized records for at least six years under Tax Administration Act (Quebec) s.34:
Sales and purchase invoices.
Supplier receipts showing GST/QST paid.
Bank and credit card statements.
Tax filings and payment confirmations.
Store records digitally and back them up in secure cloud storage.
Verify supplier registration numbers before claiming ITCs/ITRs — use the CRA GST Registry and Revenu Québec’s QST verification tool.
5. Calculating and Recording Taxes
Calculate taxes correctly:
GST = Sale amount × 5%.
QST = (Sale amount + GST) × 9.975%.
Example:
Sale: $1,000 → GST = $50 → QST = $104.74 → Total = $1,154.74.
Record taxes separately in your books:
“GST Payable” and “QST Payable” for taxes collected.
“GST Recoverable” and “QST Recoverable” for taxes paid on expenses.
6. Filing Schedule and Deadlines
Determine your filing frequency:
Annual Revenue | Filing Frequency | Deadline |
|---|---|---|
Under $1.5M | Annual | 3 months after year-end |
$1.5M–$6M | Quarterly | 1 month after quarter-end |
Over $6M | Monthly | 1 month after month-end |
File both returns electronically:
GST/HST: CRA’s My Business Account (canada.ca/my-business-account).
QST: Revenu Québec’s Mon Dossier (revenuquebec.ca/mon-dossier).
Set reminders 10 days before each deadline to avoid late penalties.
7. Claim Input Tax Credits (ITCs) and Input Tax Refunds (ITRs)
Track all business-related purchases and claim eligible credits/refunds.
Keep valid invoices showing supplier GST/QST numbers.
Exclude personal expenses or non-commercial purchases.
Common eligible expenses:
Rent, utilities, insurance.
Professional services (legal, accounting).
Office supplies, software, and marketing.
Partial eligibility (e.g., 50% rule): meals, entertainment, passenger vehicles.
8. Remitting or Receiving Tax Payments
If you owe taxes:
Pay electronically via online banking or through CRA/ARQ portals.
Transfer collected GST/QST to a separate tax holding account to ensure funds are available.
If you’re due a refund:
CRA/ARQ will issue deposits within 10–15 business days for electronic filings.
Always verify that payments and refunds match filed amounts.
9. Compliance and Audit Readiness
Prepare for potential CRA or Revenu Québec audits by maintaining:
A Tax Filing Binder with all documentation for each period.
A reconciliation summary between sales and remitted taxes.
Copies of refunds and credits applied.
Respond promptly to Revenu Québec’s Request for Information (RFI) letters with complete documentation.
Keep an internal GST/QST checklist for staff who handle invoicing or accounting.
10. Seek Professional Oversight
Hire a CPA to review filings periodically — especially if you:
Have multiple divisions or complex operations.
Handle cross-border or online sales.
Claim large ITCs/ITRs.
Schedule an annual GST/QST compliance review with your CPA to verify:
Correct rates and exemptions.
Filing accuracy and system configuration.
Documentation completeness.
At Mackisen CPA Montreal, we provide quarterly reconciliation services and audit-proof documentation systems for small businesses.
Jurisprudence and Legal Insight
Key court rulings emphasize accurate recordkeeping and taxpayer responsibility:
Hickman Motors Ltd. v. Canada (SCC 1997) — the taxpayer must prove every filing and claim.
Canderel Ltd. v. Canada (SCC 1998) — filings must reflect actual business activity.
Lac d’Amiante du Québec Ltée (SCC 2001) — Revenu Québec can reassess for missing documentation.
These cases highlight that complete, accurate records are your strongest legal protection.
Winning With CRA and Revenu Québec
At Mackisen CPA Montreal, we help small businesses stay 100% compliant:
Tax Registration & Setup – We register and configure GST/QST accounts.
Filing Automation – We set up accounting systems for auto-calculated filings.
Documentation & Reconciliation – We prepare organized, audit-ready records.
Training & Oversight – We train staff to handle GST/QST confidently and accurately.
Mackisen Service Hub: Your Sales Tax Compliance Partner
Our Mackisen Service Hub provides end-to-end GST/QST support for Quebec SMEs:
Full tax setup and registration.
Filing preparation and electronic submission.
Refund optimization and audit readiness.
Staff training and compliance reviews.
Our bilingual CPA auditors and tax lawyers — educated at McGill, Université de Montréal, and Concordia University — ensure every aspect of your business meets Quebec’s complex sales tax requirements.
Real Client Example
A Longueuil e-commerce startup underreported QST for two quarters due to invoicing errors. Mackisen CPA corrected filings, recovered $7,800 in overpaid taxes, and implemented a compliance checklist to prevent future mistakes. The company now files on time, every time, with zero discrepancies.
Why Mackisen
With over 35 years of combined CPA and legal experience, Mackisen CPA Montreal ensures that Quebec small businesses stay compliant, accurate, and audit-proof.
When you follow Mackisen’s checklist, your GST/QST filings become simple, transparent, and worry-free — freeing you to focus on growing your business.
