As a new entrepreneur, you probably have GST and QST tax numbers for your company. Now is the time to file your tax return and several questions are likely to pop up. How to go about it? How to calculate everything? How to do your tax return? How to fill the form? Whom to send the tax return to and how to pay the taxes? Do not worry. You are not alone and we will answer your questions!
Important key points to know before starting yout tax return for GST and QST
First of all, did you know that Revenu Québec is managing the GST for Canada Revenu Agency in Quebec?
Indeed, in Quebec, the provincial tax authority is charged with the administration of the GST on behalf of Canada Revenu Agency. You don’t need to register to the federal to obtain your GST number. If you are not used to the process you can count on profesional to help you make your GST and QST inscription.
So for businesses in the province of Quebec, you only need to register to Revenu Québec for your tax numbers, both federal and provincial. Then, when it is the time to do your tax return, you’ll only need to do it with Revenu Québec.
How to Calculate My GST and QST Taxes for My Tax Return
As a business in Canada, with our self-assessment tax system, you have the responsibility to have an up-to-date books of accounts. This means that you must keep all of tour transactions updated, either through a spreadsheet, software or any kind of document. You also need to keep all proofs of entitlement of your transactions.
To insure a good follow-up in your book of accounts, you need at least a sale journal and an expense journal. You should have the following for both of them:
- Date of the invoice;
- Supplier name;
- Selling/Expense amount before taxes;
- GST amount;
- QST amount.
Do not forget: as well as keeping this information for every transaction in your records, you need to keep the supporting document, in other words, a copy of the receipt, for a minimum period of 7 years.
When the time comes and you need to calculate your taxes, start with the sales section. Take your sale journal for the according period of time and calculate separately each of the following items:
- Total sales, turnover, before taxes for the desired period;
- Total GST on your invoiced sales;
- Total QST on your invoiced sales.
Once you have your total invoiced sales to your clients before taxes (GST and QST), do the same with your expenses:
- Total expenses, before taxes for the desired period;
- Total GST on your expenses with invoices;
- Total QST on your expenses with invoices.
With this information, you will be able to move on to the next step.
How to Fill In My Tax Return in Québec?
In Quebec, you need to fill in the FPZ-500 form to declare your taxes. There are 3 ways you can find this form:
- You need to create an account ‘’My Account’’ with Revenu Québec. The form will be in your account;
- Ask for a paper form to Revenu Québec, and they will send it to you by mail;
- Verify with your financial institution if it is possible to declare your taxes online, via the FPZ-500 form.
Note: simply paying the total amount you owe is not enough. There are 5 essential elements you need to take out from your sale and expense journals and that you need to provide:
- Total turnover, before taxes, for the analyzed period;
- Total GST on your invoiced sales;
- Total QST on your invoiced expenses;
- Total GST on your invoiced expenses, for which you have a receipt;
- Total QST on your invoiced expenses, for which you have a receipt.
Then, you need to calculate the 3 following:
- Take the total GST on your sales, minus the GST, to have the total GST to pay;
- Take the total QST on your sales, minus the QST, to have to total QST to pay;
- Add up the totals of 1 and 2, in other words, the GST plus the QST to pay to have your total taxes to pay (or to be reimbursed to you)
How to Send and Pay Your Tax Return?
Like mentioned above, you do not need to send anything to Revenu Canada for GST when you have a business in Quebec, because Revenu Québec administers the GST for the federal government.
You only need to make sure that Revenu Québec receives your FPZ-500 form and your payment before the deadline. Here is some advice:
- Do your tax return in advance. If you do it just a couple of days before the deadline, do not send your form and your payment by mail because the delay could be too long. You would not have any proof of payment to contest the late payment penalty. That is why we encourage you to send it online.
- Do not forget to thoroughly fill in your FPZ-500 form and include the 5 mandatory elements mentioned above.
- Keep a copy of your FPZ-500 form in your records, as well as the proof of payment with the date, in case of a late payment penalty.
- T2inc.ca really likes electronic services, so if your financial institution offers the possibility to send your FPZ-500 form electronically, and to make your payment this way as well, we strongly suggest you use their service.
To go further in the way to make your tax return for GST and QST in Québec
If you are not comfortable with this whole process, it could be wise to ask tax accountants to help you with the task. You will rest easily and will be able to focus on your business. Do not hesitate in contacting T2inc!