Businesses located outside of Quebec should prepare to meet new QST obligations in 2019.
Many businesses outside of Quebec with no physical or significant presence in Quebec and not currently registered for QST purposes will be required to register and collect QST if they sell intangibles (e.g., downloads of digital music, software, movies, TV shows and games, cloud services) as well as services and certain goods, to certain Quebec customers. Under new measures announced in the Quebec 2018 budget, Canadian businesses outside of Quebec and businesses in foreign countries that sell taxable supplies in Quebec will be required to register and collect QST where they earn $30,000 a year in revenue from certain Quebec customers. Certain digital platforms will also be affected.
As a result of this proposed change, affected Canadian businesses outside of Quebec will be subject to a new mandatory registration program. Canadian businesses outside of Quebec, and businesses that are digital platforms that help these suppliers make taxable supplies of intangibles and services, will have to register and start collecting QST on supplies of services, intangibles and goods made to customers who reside in Quebec and who are not registered for QST purposes (i.e., "specified Quebec consumers") as of September 1, 2019. Non-resident businesses located outside of Canada that sells services and intangibles to specified Quebec consumers, as well as digital platforms that help these suppliers make these types of supplies, will also have to register under the new mandatory registration program and start collecting QST as of January 1, 2019.
For more details, see TaxNewsFlash-Canada No. 2018-19 "Businesses Outside Quebec - Get Ready for New QST Rules" or contact your KPMG adviser.
Information is current to April 10, 2018. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500