Effective January 1, 2019, the Province of Quebec introduced a mandatory QST registration requirement for businesses that are non-residents of Canada selling more than $30,000 per year of intangible property or services to consumers located in Quebec.
Effective September 1, 2019 the mandatory registration has been expanded to include Canadian companies that operate outside Quebec and are registered for GST but are not already registered for QST. These businesses will need to register for QST if they sell goods, intangible property or provide services to consumers resident in Quebec and if the total charges exceed more than $30,000 in a twelve month period.
The special mandatory QST has some characteristics that differ from the regular QST. For example, businesses that are registered for the regular QST are generally entitled to claim a credit called input tax refunds (ITR) in respect of any QST incurred on business inputs. Businesses registered under the mandatory QST system will not be entitled to claim ITRs.
Businesses that are registered for GST/HST and regularly solicit orders for the sale of goods to be delivered to Quebec or have entered into an agreement for the supply of services to be performed in Quebec, or for the supply of goods to be used in Quebec can optionally register for the regular QST rather than the special mandatory QST. However, there is a requirement to provide security to Revenu Quebec under this optional registration method. The optional method would be preferable for those businesses that incur a significant amount of QST on their business inputs — for example through the purchase of goods in Quebec and /or through the purchase of services in Quebec – as ITR’s could be claimed for the QST paid