Did you know that some Quebec companies are not required to charge their customers taxes?
In Quebec, businesses and self-employed workers with small supplier status are not required to register for the Goods and Services Tax (GST) and the Quebec Sales Tax (QST). This allows SMEs in particular to lighten their corporate accounting workload.
Learn more about what small supplier status means in Quebec and find out if you qualify.
Companies eligible for small supplier status
To benefit from small supplier status in Quebec, companies must meet certain eligibility criteria.
A company can be considered a small supplier if the amount of its taxable supplies does not exceed $30,000 in a given calendar quarter or in the four preceding quarters. The amount of GST, QST, financial services and capital asset sales of a business are excluded from this total amount.
If your business meets these criteria, you are not required to register for GST and QST or to collect these taxes from your customers.
What if the amount of your taxable supplies exceeds $30,000?
If the amount of your taxable goods and services exceeds $30,000, your company automatically loses its small supplier status. From that moment on, you are required to register for the GST and QST and start filling out your corporate tax returns for GST and QST.
When do small suppliers have to register for GST/QST?
However, some businesses are required to register for GST and/or QST, even if the amount of their taxable supplies is less than $30,000. For example, cab companies are automatically required to register for GST and QST.
Businesses that sell tobacco, fuel, alcoholic beverages (except for holders of reunion permits), sell or lease new tires and road vehicles for a 12-month period must also register for QST.
Companies with small supplier status can still register for these taxes. If you decide to do so, you will have to collect taxes from your customers, but you can also apply for a tax credit to buy new equipment for your business.
Learn more about corporate accounting and taxation with T2inc
Small supplier status in Quebec therefore allows small businesses to avoid collecting and paying taxes, provided that their total taxable goods and services are $30,000 or less.
At T2inc, we help small and medium businesses in Quebec better understand how accounting and corporate taxation work.