Québec has introduced a new QST regime that will come into effect on September 1, 2019, for suppliers who are non-residents of Québec but are GST/HST registrants, referred to as a Canadian Specified Supplier (CSS). This will mainly affect Canadian suppliers (note that these QST changes took effect on January 1, 2019, for suppliers who are non-residents of Canada and not registered for GST/HST). The QST changes generally apply to goods, services and intangibles sold to Québec resident customers that are not registered for QST.
The new rules require a CSS to register, collect and remit QST on specified supplies in Québec to a specified Québec consumer (SQC):
- A CSS is a supplier who does not carry on a business in Québec, does not have a permanent establishment in Québec, is not registered for QST purposes under the regular QST system, but who is a GST/HST registrant.
- An SQC is a person whose usual place of residence is in Québec and is not registered for QST.
- Specified supplies generally include goods, services and intangibles (such as software and digitized products such as books, music files, software, movies and games).
Registration is required from the first day of a particular calendar month for which the CSS's revenue threshold exceeds $30,000. The threshold is based on sales made to individual consumers in Québec in the preceding 12-month period. This means that a CSS will need to determine whether they have exceeded the $30,000 income threshold on September 1, 2019, and if they have not, this exercise will need to be performed on the first day of every month thereafter to see if the income threshold is exceeded and registration would be required.
Once they are required to register for the new QST regime, they must then collect, report and remit the 9.975% QST on specified supplies made in Québec to SQCs. A trusted BDO tax advisor can help you navigate through these changes.
This tax tip is a publication of BDO Canada LLP on developments in the area of taxation. This material is general in nature and should not be relied upon to replace the requirement for specific professional advice. The information in this tax tip is current as of July 10, 2019.