Basic rules

The Goods and Services Tax (GST, which is 5%) applies to transactions made anywhere in Canada. In Quebec, merchants also collect the QST, at a rate of 9.975%. They are said to be registered under the regular system.

But what happens when a Quebec company purchases goods or services from suppliers who are based outside the province?

To avoid a disadvantage (for suppliers established here who must add the QST to their invoice), there is a new regime: the designated regime.

The designated regime

Non-resident suppliers whose sales in Quebec exceed $30,000 must now also register for the QST if they wish to sell to consumers in our province, even if they do not have a physical or significant presence here. Quite a change for them, but also for us!

The tax authorities are therefore proposing a designated regime under which a Quebec company registered in the QST file that makes purchases from a company outside the province does not have to pay the QST !

How to take advantage of it? Simply give your QST number to the supplier before completing the transaction.

These new rules apply to three categories of suppliers:

– foreign suppliers

– Canadian suppliers (or foreign suppliers registered under the general GST regime)

– and operators of distribution platforms who reside outside Quebec (physical products, housing, cloud services and downloads of software, music and digital entertainment products)

Here you will find the list of suppliers outside Quebec registered in the QST file . (Note that some suppliers may be registered in the regular GST regime but not in the designated QST regime).

The exception that proves the rule

If you are an individual or a Quebec company whose sales do not exceed $30,000 (i.e. you are not registered for QST), your supplier outside Quebec must still collect QST).

Benefits for our SMEs

Today, many companies are doing business with suppliers outside Quebec for all sorts of reasons: increased production volumes, access to specialized goods, etc. Without a doubt, many will be delighted to keep their cash for more urgent uses!

But don't forget to give your QST registration number to your supplier outside Quebec BEFORE completing the transaction!

If you do not do so, you will have to contact the supplier outside Quebec or the operator of the digital platform directly. However, the reimbursement mechanisms differ from one supplier to another and can be complicated. It must be admitted that many have found their reimbursement request difficult and the delays long. So be advised!

Supporting businesses

Revenu Québec has set up various online services in My File that allow businesses to view their file and subscribe to tax obligation alerts.

It also offers free, customized support for SMEs and self-employed workers by phone, videoconference, at Revenu Québec or even at your premises! Agents are there to support SMEs and self-employed workers in order to improve their understanding of their rights and tax obligations.