As of 1 January 2019, new measures come into effect in Quebec to facilitate the collection of the QST (Quebec sales tax) from businesses not established in Canada that engage in e-commerce.
Specified Registration System
Non-resident suppliers will have to go through the mandatory registration system or “specified registration system” to collect and remit the QST on taxable goods (incorporeal movable property) and services provided locally to Quebec residents not registered on the QST files.
A company can rely on several information to determine if the customer is a Quebec resident: billing and delivery addresses, IP address, payment information, etc.
Registration is mandatory for non-resident suppliers whose transactions in Quebec exceed $30,000 per year. Registration to the “specified registration system” will not lead to eligibility for an input tax refund (ITR).
The system will be accessible through Revenu Québec’s new online service which will allow non-residents to identify themselves in order to submit their returns and pay taxes each quarter. Each non-resident’s identification number will be verified.
In case of misrepresentation, forgery or non-payment of the QST, fines starting at $100 or 50% of the QST due on the transaction will be applied.
Regulations to Come
Another measure that will be implemented at a later date will specify that non-resident suppliers have to keep all documents related to the payment of the QST for a period of 6 years.
On 1 September 2019, non-resident suppliers located in Canada will also be subject to the mandatory registration system.
To find out if you are affected by the new specified registration system or for more information, contact ASD Group’s experts.