Tax Alert – New QST Registration Rules for Non-Resident Suppliers

April 19, 2018


The recent Québec budget tabled on March 27, 2018, proposed important changes for non-residents of Québec who sell into the province. The world of e-commerce has changed the way Québecers purchase goods and services and as a result, many are able to purchase them from non-resident suppliers just as easily as Québec based businesses. Under the current QST legislation, businesses based in Québec are required to be registered for QST. This is different from non-residents of Québec who currently are only required to register for QST when they have a permanent establishment or are carrying on a business in Québec. Many would argue that the present situation creates a competitive disadvantage for Québec based suppliers over non-resident suppliers.

The Québec budget proposed that:

  • Non-resident suppliers will be required to register for QST under a new specified registration system in cases where they supply taxable services and incorporeal movable property (IPP) to “specified Quebec consumers.” 
  • Canadian suppliers who are not a resident in Québec will have to register under this system where they supply taxable movable property, services and IPP to “specified Quebec consumers.”
  • Digital platforms that control the key elements of transactions with specified Quebec consumers, such as billing, transaction terms and condition and delivery terms will be required to register under this new system.

A “specified Québec consumer” is a proposed term that includes a person not registered for QST and whose usual place of residence is located in Québec. To validate a person’s usual place of residence, non-resident suppliers will be required to obtain two pieces of information such as a billing address or personal address, the IP address of the devise used or payment-related bank information.

Take note that the new specified registration system will be required only where the taxable supplies in Québec exceed a threshold of $30,000. The threshold will be computed by taking into account all taxable supplies made in Québec during the 12-month period preceding the month that includes the particular date. This is not a high threshold and may apply to many non-residents making taxable supplies to specified Québec consumers. Under this specified registration system, non-residents will be able to file QST returns electronically with Revenu Quebec and remittances will be accepted by electronic payment. However, it is important to note that as a registrant under this system, there will be no ability to claim input tax refunds (ITRs) for QST paid on business expenses. If a non-resident wants to be able to claim ITRs then it must register under the general QST system.

These important changes are proposed to come into effect:

  • On January 1, 2019 for non-residents of Canada and
  • On September 1, 2019 for Canadian residents outside of Québec

Start planning ahead

Although draft legislation has not been released by Québec, the time to start planning for these changes is now. Non-resident businesses will have to review how the new registration will affect them so they are prepared in 2019.

Contact the BDO Indirect Tax Team to help you navigate through these changes.

The information in this publication is current as of April 13, 2018.

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.