Doing Business in Québec From Another Province

Do Québec customers mean I must charge QST?

No. A customer address alone does not decide whether an out-of-province business must register for QST. First identify where the sale is made, what is sold, whether the buyer is registered for QST, and whether the seller carries on commercial activities in Québec. Revenu Québec separates general and specified registration.

GST/HST is a separate invoice question. See when to register for GST/HST for that tax and its interprovincial rules.

When does commercial activity in Québec require general QST registration?

A business that carries on commercial activities in Québec generally must register under the general QST system when its worldwide taxable supplies, together with those of its associates, exceed $30,000 in one calendar quarter or the preceding four calendar quarters. Count taxable sales outside Québec, but exclude GST/HST and QST, financial services, and sales of capital property from this test. Revenu Québec states the registration rule and explains the exclusions.

If sales exceed the limit in one quarter, collection begins on the sale that crosses it. If they exceed it only across four consecutive quarters, small-supplier status generally ends after the following calendar month. Revenu Québec explains the different start dates.

For an out-of-province seller, whether activities are carried on in Québec depends on the actual work and business presence there. A Québec invoice address does not answer that question. Some activities, including certain retail sales and admissions to Québec events, require registration even below the ordinary small-supplier limit. Check the mandatory-registration exceptions before relying on the threshold.

Goods have an additional rule. An outside seller may have to register under the general QST system when qualifying taxable sales of goods stored in Québec, shipped within Québec, or shipped from outside Québec and delivered there other than by mail or courier exceed $30,000 over a 12-month period. Registration is required as soon as the qualifying total crosses the limit. The rule targets supplies to people who are not general QST registrants, subject to its stated exclusions. Check the shipment method and any registered platform before adding sales to this test. Revenu Québec sets out the goods rule.

When does an out-of-province seller use specified QST registration?

An outside seller registered under the general GST/HST system generally uses specified QST registration when it makes taxable sales in Québec of goods, intangible property, or services to specified Québec consumers and those qualifying sales exceed $30,000 over a 12-month period. Registration is required as soon as the qualifying total crosses the limit. Sales through a specified distribution platform may be excluded from the seller's threshold under the conditions Revenu Québec lists. See its specified-system test.

This is a different calculation from the worldwide small-supplier test. A seller of goods may need to run both the specified-system test and the separate general-system goods test. If both require registration, register only under the general system. Revenu Québec states this priority. A seller that carries on business in Québec cannot use the online service reserved for outside suppliers. The eligibility conditions are listed here.

An outside seller registered under the general GST/HST system may choose general QST registration instead of specified registration if it qualifies for optional registration, but must provide and maintain security acceptable to Revenu Québec. Apply through the general registration route below when specified registration becomes required. Unlike specified registration, general registration can allow input tax refunds on eligible purchases. See the registration choice and refund rules.

Do consumer and QST-registered business sales count differently?

Yes. A specified Québec consumer can be an individual or business whose usual place of residence is in Québec and that has not provided acceptable proof of general QST registration. Count qualifying taxable sales to both. A recipient that provides a general QST registration number containing TQ is outside the specified-system collection rule for that sale; keep the number and the evidence used to classify the customer. Under the general system, a registrant collects QST on taxable Québec sales regardless of the buyer's QST registration status. Revenu Québec contrasts the collection rules.

For the specified system, check at least two pieces of evidence of the customer's usual place of residence and whether the sale is taxable in Québec. If Canadian home or business addresses outside Québec outnumber those in Québec, the customer's usual residence is deemed outside Québec despite other location evidence. Québec Sales Tax Act, section 477.3. A business name or a GST/HST number alone does not establish general QST registration. Once required to collect under the specified system, the QST rate on qualifying non-zero-rated supplies is 9.975%. See Revenu Québec's collection rules.

How do I register without a Québec address or NEQ?

Choose the QST system first. For specified registration, use My Account for suppliers outside Québec. Revenu Québec says Form LM-1-V must not be used for specified registration. For general QST registration, contact Revenu Québec; its online business registration service or Form LM-1-V can open a general QST file. The form can also open a source-deductions account when needed. On LM-1-V, select the accounts on page 1, enter the QST effective date in section 5.1.1 or first pay date in section 6.1, and sign section 8. A partnership without an NEQ also needs its partners' signatures in section 2.4.

An NEQ is issued through Québec's enterprise register, a separate process. A Québec customer does not itself give a business an NEQ, and Revenu Québec's first-remittance instructions expressly allow an employer to remit with an NEQ if it has one. Check enterprise registration independently below.

Specified QST registrants file a separate online QST return each calendar quarter and remit by the last day of the following month. Revenu Québec gives the filing dates.

Before applying, gather the legal business name, home-province address, GST/HST number, sales by product and customer type, delivery records, any general QST customer numbers, and the date each threshold was crossed.

What if I invoiced Québec customers before registering?

Reconstruct the first date QST registration and collection may have been required, then reconcile invoices and QST by reporting period. The seller is responsible for tax it was required to collect, even if an earlier invoice did not show it. Revenu Québec describes the seller's collection duty and says a general registrant reports tax collected or required to be collected.

Separate taxable from exempt or zero-rated sales, consumer from TQ-registered customer sales, and direct from platform sales. Determine the correct registration date and periods with Revenu Québec before changing old invoices or returns. If the error concerns the GST/HST rate or an already-filed GST/HST return, see how to correct a wrong GST/HST rate.

The legal form also affects who pays. A sole proprietor owes the business's QST personally. Under Québec Sales Tax Act, section 345.5, partners and former partners other than limited partners who are not general partners can be liable for partnership QST obligations arising during their membership; liability for earlier amounts is limited to partnership property and money. Under Tax Administration Act, sections 24.0.1–24.0.2, directors in office when a corporation fails to collect or remit required QST may owe unpaid tax, interest and penalties after specified collection failure, bankruptcy or winding-up. Reasonable-care and lack-of-knowledge defences apply, and Revenu Québec cannot assess a director more than two years after they cease to be one.

Does a worker living in Québec make Québec the province of employment?

No. For a Canadian-resident employee, the province of employment usually follows the employer establishment where the employee physically reports or, under the remote-work policy, is reasonably attached. An employee's home office is generally not the employer's establishment. If the employee neither reports nor is attached to an employer establishment, the province of employment is generally where the establishment paying the salary is located. CRA sets out these tests.

First check whether the employee physically reports to an employer establishment, even occasionally; CRA sets no minimum time. If they report to establishments in more than one province in a pay period, use the one where they spent the most time, or where they last worked if tied. If the employee never reports, examine any full-time remote-work agreement and the establishment where they would report without it. Prior reporting location, supervision, equipment, instructions and meetings can matter. CRA and Revenu Québec both describe attachment tests. A worker who lives in Montréal but remains attached to an Ontario office can therefore have Ontario as their province of employment for source deductions. Their province of residence can still affect their personal return.

When do I need a Québec employer account, and how do I fix past pay?

An employer generally must make Québec source deductions and employer contributions when an employee reports or is attached to its Québec establishment, or when an employee who reports to no establishment is paid from a Québec establishment. Revenu Québec lists the conditions and special-case warning. If Québec is the province of employment, CRA says to deduct QPP instead of CPP and QPIP as well. If Québec source deductions are required, register through Revenu Québec's Register a New Business service, My Account for businesses, or Form LM-1-V. Revenu Québec assigns a source-deductions file number, separate from an NEQ issued by the enterprise register. See the employer registration routes.

If prior pay used the wrong province, review each pay period: where the employee physically reported, any full-time remote agreement, which establishment supervised and paid them, deductions taken, remittances sent, and tax slips issued. Then reconcile the CRA and Revenu Québec accounts before changing payroll records or slips. A change in work arrangement can change the result partway through a year. For routine deductions and remittance steps after deciding the province, see running payroll.

For unpaid Québec payroll amounts, Tax Administration Act, sections 24.0.1–24.0.3 can also reach corporate directors and people who authorize another person's payroll payments. Partners may owe the partnership's missed deductions and contributions. For Canadian-resident employees' income tax that was never withheld, directors generally owe related penalties and interest, not the unwithheld income tax itself; QPP and QPIP have different rules. Revenu Québec explains the distinctions.

Does my corporation or partnership need an NEQ?

An out-of-province corporation or partnership must assess enterprise registration separately from QST and payroll. Québec says a legal person or partnership not constituted in Québec must register if it carries on an activity in Québec or holds an immovable real right there other than a priority or hypothec. Its activity examples include having a Québec address or representative there, or an act in Québec performed for profit. Merely sending an invoice to a Québec client does not establish those facts. A worker doing business activities in Québec may change the assessment. See Québec's registration criteria.

For a legal person not constituted in Québec that must register, Québec requires a declaration within 60 days of starting activities and assigns an NEQ when registration is complete. The same deadline applies to an out-of-province partnership that must register. An enterprise with no Québec address generally must declare a Québec mandatary, subject to the stated exception. See the foreign legal-person registration instructions. A sole proprietor operating in Québec under a name without both their given name and surname must also file a registration declaration within 60 days; operating only under their own name normally avoids that requirement. See Québec's sole-proprietor instructions. Staying unregistered when registration is required can bring a fine of $2,000 to $20,000. Filing a declaration late can bring $500 to $5,000 for an individual or $1,000 to $10,000 for another entity; repeat-offence fines double. Act respecting the legal publicity of enterprises, sections 152, 155 and 162.1. For provincial income-tax allocation and corporate returns, see operating in more than one province.

Example

Illustrative amounts are in Canadian dollars. An Ontario GST/HST registrant with no Québec business activity sells taxable digital downloads directly to Québec customers whose usual residence is supported by its records. Over a 12-month period, it bills $40,000 to customers who did not provide general QST registration evidence and $20,000 to businesses that provided valid TQ numbers. The qualifying $40,000 exceeds the specified-system threshold, so specified QST registration is required unless the general system applies. The $20,000 of TQ sales does not enter that threshold. If the company begins storing goods in Québec, it must also check the separate general registration test.

Different for you?

• Your invoice's GST/HST treatment is unclear: see when to register for GST/HST.
• You charged the wrong GST/HST rate or filed a return with it: see correcting the wrong GST/HST rate.
• Your Québec activity may affect business income tax: see operating in more than one province.
• Your employee's province of employment is settled: see running payroll.
• You sell in other provinces too: see provincial sales tax.
• You crossed a QST threshold, used the wrong system, or paid a worker under the wrong province: gather dated invoices, customer QST numbers, delivery and platform records, the remote-work agreement, pay stubs, remittances and tax slips; get a review through bookkeeping support before changing past filings.