WHEN IS QST REGISTRATION MANDATORY FOR SMALL BUSINESSES?

One of the most important — and misunderstood — obligations for new and growing Quebec businesses is knowing exactly when QST registration becomes mandatory. Many entrepreneurs wait too long, assume they qualify as “small suppliers,” or believe they only need to register once they become profitable. In reality, Quebec’s rules are strict, and failing to register on time can lead to retroactive tax liability, penalties, and compliance problems.

This guide explains when QST registration becomes mandatory, the rules for small suppliers, and the situations where voluntary early registration is more beneficial for small businesses.

LEGAL AND REGULATORY FRAMEWORK

The obligation to register for QST is governed by the Quebec Taxation Act. Under Quebec’s rules, QST registration becomes mandatory when:

• your worldwide taxable revenues exceed $30,000 in the last four consecutive calendar quarters, or
• your revenues exceed $30,000 in a single quarter

This applies to all businesses making taxable supplies, including:

• freelancers
• consultants
• retailers
• e-commerce sellers
• contractors
• online service providers
• incorporated or unincorporated businesses

These rules follow the same threshold as federal GST registration.

KEY COURT DECISIONS

Multiple court rulings confirm strict enforcement of the $30,000 threshold:

• businesses cannot avoid registration by claiming they “didn’t know”
• crossing the threshold — even unintentionally — triggers mandatory registration
• late registrants owe QST retroactively, even when they failed to charge tax
• businesses cannot invoice customers retroactively without consent
• verbal agreements or misunderstandings do not override statutory requirements

Courts have consistently supported Revenu Québec’s authority to reassess QST that should have been collected.

WHY REVENU QUÉBEC MONITORS SMALL BUSINESSES CLOSELY

Small businesses often trigger reviews because they:

• underestimate their revenue totals
• mix business and personal income
• delay registration until an audit or refund issue arises
• issue non-compliant invoices
• misinterpret whether their service or product is taxable
• grow faster than expected

Revenu Québec uses transaction data, industry comparisons, and online activity to detect businesses that should already be registered.

WHEN IS QST REGISTRATION MANDATORY FOR SMALL BUSINESSES?

Below are the key criteria and real-world examples.

1. When revenues exceed $30,000 in four quarters

If your taxable revenues total more than $30,000 in the last 4 consecutive quarters, you must register.
Example:
• Q1: $8,000
• Q2: $7,000
• Q3: $9,000
• Q4: $7,500
Total = $31,500 → registration required.

2. When revenues exceed $30,000 in a single quarter

Even if prior quarters were small, exceeding $30,000 in one quarter triggers immediate mandatory registration.
Example:
• Q1: $31,000 → register now.

3. When making taxable supplies regularly

Even below the threshold, Revenu Québec may require registration if the business appears to be operating commercially and collecting regular income.

4. When selling taxable goods or services online

Online sellers shipping to Quebec customers must apply the same threshold as physical businesses.

5. When providing taxable services (most services)

Only certain health, education, and financial services are exempt. Consultants, coaches, tradespeople, and professionals must follow the $30,000 rule.

6. When operating multiple small activities under one person or business

Revenue from all businesses combined count toward the threshold.

7. For non-resident suppliers selling to Quebec customers

Special QST registration rules apply to:
• digital service providers
• e-commerce sellers
• subscription platforms
• non-Canadian companies selling into Quebec

They may need to register even before $30,000, depending on the rules.

WHEN SHOULD SMALL BUSINESSES REGISTER VOLUNTARILY?

Voluntary early registration is often the smarter choice because it allows you to:

• claim input tax refunds on business expenses
• create compliant professional invoices
• avoid tracking the threshold too closely
• avoid retroactive tax problems
• appear more credible to business clients

Startups, consultants, and e-commerce businesses typically benefit from early QST registration.

CONSEQUENCES OF LATE REGISTRATION

Businesses that delay registration often face:

• retroactive QST liability
• out-of-pocket remittances (because customers were not charged tax)
• penalties and interest
• refund denials
• audit flags
• non-compliant invoices
• complex backdated corrections

These consequences are preventable with timely registration.

MACKISEN STRATEGY

Mackisen CPA helps small businesses determine exactly when registration is required — and whether early registration is advantageous. We monitor revenue thresholds, analyze business activity, complete the registration process with Revenu Québec, and set up compliant invoicing and tax systems.

We also handle late registrations, back filings, and voluntary disclosures to minimize penalties.

REAL CLIENT EXPERIENCE

A fitness coach exceeded $30,000 unknowingly and received a QST assessment. Mackisen registered them retroactively and reduced penalties.

An e-commerce startup registered voluntarily and recovered thousands in QST credits during its launch.

A consultant provided exempt and taxable services but misclassified them. Mackisen corrected their status and filed accurate returns.

COMMON QUESTIONS

What happens if I pass $30,000 for one month only?
Registration is required if your quarterly total exceeds $30,000, even if it’s from one large contract.

Do I need to register if I expect to exceed $30,000 soon?
Voluntary registration is recommended to avoid last-minute issues.

Can freelancers stay unregistered?
Only if their taxable revenues stay below the threshold and they choose not to register.

Does QST apply to all goods and services?
Most — but not all. Some services are exempt.

WHY MACKISEN

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps small businesses understand and meet QST registration requirements. Our guidance protects you from penalties, strengthens compliance, and ensures you never miss a mandatory registration trigger.