One of the most important steps in starting a business is registration for GST, QST and deductions at source accounts. Failure to do so can result in substantial penalties which can easily be avoided if the proper paperwork is done on a timely basis.
As a rule, you must register for GST if you carry on commercial activities in Canada and for QST as well if you carry on commercial activities in Québec. And you must register for deductions at source if you hire any employees including yourself.
Specifically, you must register for GST and QST if your total worldwide taxable supplies (including sales, rentals, exchanges, transfers, barter, etc.) and those made by your exceed $30,000 in a given calendar quarter or in the four preceding calendar quarters. If you are just starting off in business, you should keep track of your revenue knowing that as you reach $30,000 it is time to register if you haven’t already done so.
If you are a small business without many expenses such as a service or consulting business, it may be preferable to register under the quick method. Although you cannot claim input credits for expense you pay less GST and QST generally resulting in better cash flow.
This article focuses on the registration process, particularly online registration.
Online GST and QST registration
The first step if you have not already registered your business with Revenu Québec is to do so by accessing clicSEQUR-Enterprises on the Entreprise Québec website. You should have on hand your business’ identification number, the name and position of the business’s authorized representative and the name(s) of the persons in charge of online services.
Once your business is registered on the Entreprise Québec website, you can complete form LM-1-V online to register for QST and submit it directly to “My Account for Business”.
To complete form LM-1-V you will need to know your Québec Enterprise Number (NEQ) number as well as your federal Business Number (both available online), and the names and contact information of directors if you are incorporated. Most of the questions are self explanatory. However, if unsure of an answer reach out to your accountant. You will also be asked how often you want to remit GST and QST – monthly, quarterly, or annually. Most businesses prefer annual. However, there are criteria that must be met to qualify for quarterly or annual filing. Your accountant can help you determine your minimum filing requirement.
Once registered for QST you are automatically registered for GST and HST. This is helpful if you conduct business in jurisdictions operating in provinces subject to HST and are required to charge HST.
To register by phone, you can call Revenu Québec at 514-873-4692. You should have on hand the same documents needed when registering online.
Deductions at source registration
You can register for a Quebec deductions at source account at the same time as registering for GST and QST, using the same form.
The following information is needed to open a deduction at source account:
- Number of employees
- Expected total salaries for the year
- Payroll frequency
- Remittance Frequency to pay DAS (monthly or quarterly)
- Payroll start date
- Effective date of payroll
- Payroll first payment date
As opposed to GST, registration for a federal deductions at source account must be done separately. You can register for source deductions with the Canada Revenue Agency (CRA) by contacting them online to open a payroll program account. or calling them at 1-800-959-5525.
Deduction at source accounts must be opened before the first remittance due date. Your first remittance due date is the 15th day of the month following the month in which you began withholding deductions from your employee’s pay, unless the CRA allows you to remit using a different frequency.
You must have the following information to open a federal deductions at source account:
- date employees received their first wages (or leave blank if date is unknown)
- months covered for payroll of employees’ wages
- type of pay period (for example, weekly, quarterly)
- number of employees
- payroll service name (if any)
- country of the parent company or affiliate, if you have a foreign owned corporation
- name of franchisor (if any)
- country of franchise’s head office (if any)
We’re here to help
Want to start your business on the right foot? Need help in registering your business for GST/QST and deductions at source? For any questions related to setting up your business for success, including online accounting and automated payroll, or even outsourcing some parts or all of it so you can focus on growing your business, please do not hesitate to contact one of our team members.