How do you record GST and QST in your books in Québec?
Short answer: keep the GST and QST you collect on sales in liability accounts, and the GST and QST you pay on business purchases in separate accounts for input tax credits (ITCs, federal) and input tax refunds (ITRs, Québec). Never mix the taxes into sales or expenses. Each period, collected minus paid is what you remit (or get back), separately for GST and for QST. To claim ITCs and ITRs, your supplier invoices must show certain information, which depends on the amount.
The rates and how they apply
In Québec, GST is 5% and QST is 9.975%, both calculated on the selling price before taxes. The QST is not calculated on top of the GST. Combined, that's 14.975%.
The accounts to set up
- GST collected (liability)
- QST collected (liability)
- GST paid, ITCs (asset or contra-liability)
- QST paid, ITRs (asset or contra-liability)
Some software nets collected and paid in one account per tax. Either way, GST and QST stay separate: one goes to the CRA's program, the other to Revenu Québec's, even though Revenu Québec administers both for most Québec businesses.
Worked example
In one quarter, you invoice a client $1,000 plus taxes and buy $400 of supplies plus taxes.
- Sale: revenue $1,000, GST collected $50, QST collected $99.75. Total invoice $1,149.75.
- Purchase: expense $400, GST paid $20, QST paid $39.90. Total paid $459.90.
- To remit: GST $50 minus $20 = $30; QST $99.75 minus $39.90 = $59.85.
Your revenue in the books is $1,000, not $1,149.75. The taxes were never yours.
What an invoice must show to support a claim
The CRA and Revenu Québec use the same tiers, based on the total amount of the invoice, but the QST side asks for a little more. On the federal side, these thresholds replaced the old $30 and $150 thresholds on April 20, 2021.
- Under $100: supplier's name (or business name), invoice date, total amount. For the QST, also the amount of tax and a description of what you bought.
- $100 to $499.99: all of the above, plus the amount of GST and QST charged and the supplier's GST and QST registration numbers.
- $500 or more: all of the above, plus your name or business name, the terms of payment and a description of the goods or services.
If a supplier charges QST but the invoice has no QST number, ask for a corrected invoice before you claim. Revenu Québec offers a tool to validate a QST registration number, and the CRA has a GST/HST registry search.
Common mistakes we fix
- Recording the total with taxes as an expense, so the ITC and ITR are never claimed.
- Claiming taxes on a purchase from a supplier who isn't registered and didn't charge any.
- Claiming 100% of the taxes on meals and entertainment. These expenses are generally 50% deductible, and ITCs and ITRs are limited the same way.
- Claiming taxes on personal purchases, or before you were registered.
- Waiting too long. Most registrants have about four years to claim an ITC or an ITR.
For the registration threshold itself, see our article on the $30,000 small supplier rule.
Want us to set up your tax accounts properly?
Book a free 30-minute session at soleraaccounting.ca/rendez-vous or call 450 612-7223. We'll check how GST and QST are set up in your software and make sure you're claiming every credit you're entitled to. Service in French, English and Arabic.
This article is general information, not personalized accounting or tax advice.
Frequently asked questions
What is the difference between an ITC and an ITR?
An input tax credit (ITC) recovers the GST you paid on business purchases. An input tax refund (ITR) is the Québec equivalent for the QST. Both are claimed on your GST/QST return.
Does a supplier invoice need a QST number for me to claim the ITR?
Yes, once the invoice totals $100 or more. Under $100, the registration numbers are not required, but the invoice still needs the supplier’s name, the date, the total and, for the QST, the tax amount and a description.
Should GST and QST be included in my revenue?
No. Taxes you collect are a liability you owe to the government. Your revenue is the selling price before GST and QST.
Sources
- Revenu Québec – Calculating the Taxes
- Revenu Québec – Preparing Invoices (information required by amount)
- CRA – Input tax credits
- Revenu Québec – Claiming ITRs and ITCs (four-year limit)
- CRA – Excise and GST/HST News No. 118 (thresholds of $30 and $150 replaced by $100 and $500)
- Justice Laws – Input Tax Credit Information (GST/HST) Regulations, section 3
- Revenu Québec – Meal and Entertainment Expenses (ITCs and ITRs)
- Revenu Québec – API Used to Validate a QST Registration Number
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