WHAT’S THE DIFFERENCE BETWEEN GST/HST AND QST RETURNS?

Quebec is the only province in Canada where businesses file both GST/HST and QST through a single combined return — the FPZ-500-V. But despite being filed together, GST/HST and QST are still separate taxes governed by separate laws, with different rules, rates, and administrative systems. Many business owners mistakenly believe the taxes are interchangeable, or that a mistake in one section affects the other the same way. This guide explains the key differences between GST/HST and QST returns, how each tax is calculated, and what Quebec businesses must understand to stay compliant.

Understanding these differences ensures accurate filing, clean recordkeeping, and audit-proof compliance.

LEGAL AND REGULATORY FRAMEWORK

GST/HST and QST come from two separate laws:

• Excise Tax Act governs GST (5%) and HST (13–15%)
• Quebec Taxation Act governs QST (9.975%)

Quebec administers both taxes for Quebec businesses, but:

• GST/HST is federal
• QST is provincial
• each has its own definitions, rules, credits, and rates

Both are reported on the same form in Quebec the FPZ-500-V.

KEY COURT DECISIONS

Courts consistently confirm that:

• GST/HST and QST are legally distinct taxes
• eligibility for ITCs (GST) does not guarantee eligibility for ITRs (QST)
• mistakes in GST can be reassessed independently of QST
• deadlines and objection routes differ
• Quebec’s QST rules can be more restrictive in some cases

The combined return does not merge the taxes legally.

WHY BUSINESSES GET CONFUSED

Common sources of confusion include:

• filing both taxes on one form
• similar terminology (ITC vs ITR)
• similar calculation structures
• POS systems using a single “tax” code
• accounting software displaying combined totals
• GST/HST administration being federal in other provinces
• bilingual terminology (TPS/TVH vs TVQ)

Understanding the distinctions prevents errors and refund delays.

WHAT’S THE DIFFERENCE BETWEEN GST/HST AND QST RETURNS?

Below is the detailed breakdown.

1. GOVERNING LAW

GST/HST:

• Excise Tax Act (federal)

QST:

• Quebec Taxation Act (provincial)

QST is not an HST-like tax — it is independent.

2. TAX RATES

GST:

• 5%

HST (other provinces):

• 13%–15% depending on province
(Not applicable in Quebec)

QST:

• 9.975%

The rates differ and must be entered separately on returns.

3. CREDITS YOU CLAIM

GST/HST → Input Tax Credits (ITCs)

Refund of GST/HST on eligible business expenses.

QST → Input Tax Refunds (ITRs)

Refund of QST on eligible business expenses — similar but not identical rules.

4. ELIGIBILITY RULES DIFFER

Some expenses eligible for ITCs may face different rules for ITRs.
Examples:

• large business restrictions (LBITRs) affect QST more than GST
• allocation rules for mixed-use supplies differ
• documentation requirements differ subtly

5. ADMINISTRATION

Quebec

• Administers both GST and QST
• Filing through Revenu Québec
• One return: FPZ-500-V

Rest of Canada

• GST/HST filed with CRA
• QST does not exist outside Quebec

6. PLACE-OF-SUPPLY RULES

GST/HST

• Determines whether to charge GST only or HST
• Depends on customer province

QST

• Applies only to sales made to Quebec consumers
• Mandatory for Quebec suppliers and non-residents selling into Quebec under certain rules

7. RETURNS ARE COMBINED BUT NUMBERS ARE SEPARATE

On the FPZ-500-V:

• GST section appears first
• QST section appears second
• totals combine at the end

Each section must be calculated independently.
A mistake in one section does not automatically fix or affect the other.

8. REFUNDS MAY BE VERIFIED DIFFERENTLY

Revenue Québec may audit:

• GST refunds
• QST refunds
• or both independently

Different documentation may be required for ITCs and ITRs.

9. FILING FREQUENCY IS THE SAME BUT THE RULES DIFFER

GST and QST use the same filing frequency in Quebec:
• monthly
• quarterly
• annual

But:

• adjustments
• exceptions
• rebate programs
• deadlines for objections

may differ between the two tax systems.

10. REPORTING ERRORS ARE CORRECTED DIFFERENTLY

GST corrections follow federal rules.
QST corrections follow provincial rules.

Some errors require adjustments.
Others require amended returns.

MACKISEN STRATEGY

Mackisen CPA helps Quebec businesses accurately complete both the GST/HST and QST portions of the FPZ-500-V return. We:

• reconcile tax collected vs. tax paid
• verify ITC and ITR eligibility
• separate taxable vs exempt supplies
• correct calculation errors
• prepare adjustments or amended returns
• respond to verification requests
• optimize filing systems

We ensure both tax sections are accurate, complete, and audit ready.

REAL CLIENT EXPERIENCE

A retailer misreported GST as QST for months. Mackisen corrected filings and resolved refund delays.

A consultant applied ITCs correctly but miscalculated ITRs. Mackisen built a unified system to distinguish both tax types.

An e-commerce seller’s platform mixed tax rates. Mackisen updated coding to separate QST from GST/HST properly.

COMMON QUESTIONS

Is GST the same as QST?
No separate laws, separate rates, separate credits.

Do I file both taxes together?
Yes, but the numbers must be calculated separately.

Do ITCs and ITRs follow the same rules?
No there are key differences.

If I made an error in one section, does it affect the other?
Only if the underlying transaction was coded incorrectly.

WHY MACKISEN

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses understand, calculate, and file GST/HST and QST returns properly. Our expertise ensures full compliance, faster refunds, and fewer verification requests.