New Quebec sales tax obligations for foreign online sellers

Until recently, U.S. businesses were not required to register for Quebec sales tax (QST) unless deemed to be “carrying on business” in Quebec. As part of its 2018-2019 budget, Quebec has enacted QST obligations for nonresident e-commerce sellers. Effective Jan. 1, 2019, certain nonresident foreign suppliers will be required to register for and collect QST.

The new rule stipulates that nonresidents of Canada have to charge QST on the supply of intangible property, also referred to as incorporeal property and services (e.g., patents, intellectual property, etc.). Tangible property and goods coming from outside Canada are excluded. Also exempt from the registration rules are small suppliers (if taxable supplies in Quebec are less than $30,000 in a rolling four-quarter period).

For more information on these new obligations, please visit the Baker Tilly Canada website.

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.

For more information on this topic, or to learn how Baker Tilly tax specialists can help, contact our team.