Month-end close: GST and QST in Quebec

In Quebec, GST and QST are both filed with Revenu Québec, not the CRA, and a late QST payment costs 7%, rising to 15%.

This is part of the sales tax checklist. In Quebec, Revenu Québec generally administers the GST/HST, so a client based in Quebec files with it, not the CRA [1]. The Canada GST/HST page covers every other province.

Rate. GST is 5% and QST is 9.975% (since January 1, 2013).

Filing. Revenu Québec assigns the frequency from the client's expected annual taxable sales in Canada, the same for GST and QST: $1,500,000 or less is annual, over $1,500,000 up to $6,000,000 is quarterly, and over $6,000,000 is monthly. A smaller client can elect a shorter period.

Due. One month after a monthly or quarterly period, and generally three months after the period for an annual one.

The trap. A QST payment up to 7 days late costs 7%, 8 to 14 days 11%, and more than 14 days 15%. A QST return not filed costs another $25 a day, up to $2,500. A late GST return costs 1% of the unpaid amount plus 0.25% for each full month, up to 12.

The month-end steps

1. Confirm the filing frequency. Revenu Québec shows it on the client's confirmation of registration. GST and QST must have the same fiscal year, so the frequencies are identical [2]. Done when the frequency and fiscal year on file match the confirmation.

2. Check registration for a client near the threshold. A business registers for GST and QST when its worldwide taxable supplies, with those of its associates, exceed $30,000 in a calendar quarter or in the four preceding quarters. A taxi business registers for GST and QST whatever its sales. For the QST, so does a business that sells tobacco or fuel at retail, sells alcoholic beverages (unless it holds a reunion permit), sells or leases new tires, or sells road vehicles, among others [4]. Done when a client with sales near $30,000 has been tested against both periods.
3. Check both rates on every sale. GST is 5% and QST is 9.975% [5]. Done when each taxable sale carries both.
4. File and pay with Revenu Québec, not the CRA. The net GST and QST payable is remitted when the return is filed, and a refund is claimed the same way [2]. Monthly and quarterly returns are due one month after the end of the period. Annual returns are generally due three months after it [2]. Done when each return is filed by its due date.
5. Annual filers: schedule the instalments. An annual filer must generally pay the GST and QST in four instalments, due the last day of the month after each quarter of its fiscal year [2]. Done when the four dates are on the client's calendar.
6. Individuals with business income, an annual frequency and a December 31 year end. The return is due June 15 of the following year, but anything owing must be paid by April 30 [2]. Done when the April 30 payment is scheduled.
7. Know what late costs. A QST payment or remittance up to 7 days late costs 7% of the amount, 8 to 14 days late 11%, and more than 14 days late 15% [6]. A QST return not filed costs a further $25 a day, up to $2,500. A late GST return costs 1% of the unpaid amount plus 0.25% of it for each full month it is late, up to 12, and nothing when the balance is zero or a refund [7]. Done when each month's payment went out by its due date, or the late ones are flagged for the client.