Candian Consulting Company & QSt/GST

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Joined: Fri Feb 18, 2005 8:45 pm

Candian Consulting Company & QSt/GST

Post by webcite_99 »

Situation: A newly formed Canadian company (federal charter) with a home office in Quebec.

Question 1: When providing consulting services to a US company (no nexus to Canada) does GST & QST have to be charged?

Question 2: Assuming that no GST or QST is charged when providing services to US companies, and the only clients serviced are from the US (i.e. no QST or GST ever collected in any given year), does the newly formed Canadian company still need to register for a GST & QST number?

Question 3: If no QST or GST ever collected b/c all clients are US companies, can the Canadian company ever offset the QST & GST it pays in its purchases from other revenue or is no offset possible because there is no corresponding QST & GST to offset against?
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Joined: Sun Jul 06, 2008 3:32 pm

Post by visasquestions »

Answer Question 1:
I have a company (provincial charter) in Quebec and I provide services to a NY company (sister's company). I'll give you my example so you can refer to, I do IT consulting and NY doesn't require sales taxes for services. So no need to add NY sales taxes to your customer, since your US customer will not collect GST+QST for you, you don't need to add them to your invoice.

Answer Question 2:
In Quebec, you need to register your GST and QST numbers even though you don't collect any taxes. I pay 0 GST+QST taxes every year since I don't collect them.

Answer Question 3:
If you collect GST+QST taxes from other customers you can obviously deduct your GST+QST expenses againt your collected GST+QST, I have never tried to deduct my GST+QST expenses againt a 0 collected GST+QST. I don't think the Quebec government would reimburse taxes you didn't collect, but you can always ask. Compare to other govs Quebec is one of the most friendly (compare to NY) and relaxed in terms of enforcing rules
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