Ronika Khanna walks through setting up GST/HST/QST in QuickBooks Online for Quebec businesses. You'll configure your province, filing frequency, and registration numbers, then apply the right tax codes to invoices. An Ontario customer gets charged 13% HST as an example.
Hello everyone. Today we're going to look at how to set up sales tax for the first time in QuickBooks Online. And in this case we are going to be setting it up for the Province of Quebec. So it should be noted that in Quebec, both gst, HST and QST are administered by Revenue Quebec. This means that the filing of the sales tax reports for gst, HSC and QSD are usually submitted and reported only to Revenue Quebec. This is different from all other Canadian provinces where the GST and HST submission is done directly to Revenue Canada.
So without further ado, let's look at how to set up sales taxes using Quebec as the province where the business is located. So we navigate over to the left hand side, click on taxes. This may also be called sales tax. And if you have payroll you might actually have a drop down with sales tax and payroll taxes. So click on taxes and simply click on Setups Sales tax and here is where you are going to choose the province or territory where your business is located. And you can choose any one of these. The process will be virtually the same. There was only one difference which I will highlight as we see it. So let's scroll down to Quebec. We'll click on Save.
And then we get another screen that shows us the different options available. In terms of reporting period, you'll note that the agency is Revenue Quebec. For all other setups, this will actually be Canada Revenue Agency.
So this is where you are going to enter the start of your fiscal year. If you're a sole proprietorship or a partnership, this is almost always going to be January. If you are a corporation, this is the beginning of your fiscal year. Which for example, if your year end is June 30, the beginning of your fiscal year will be July 1. Make sure this is also the same as the beginning of your gst, HSC and QST reporting period. If for some reason it is different, which it is, occasionally you will put the period that relates to your GSTHST and QST reporting period Filing frequency. You have three options. It can be monthly, quarterly or annually. I have not seen half yearly. This may pertain to larger corporations. So depending on what it is, you will choose your filing frequency. This will be available on the inscription sheet that you received from Revenue Quebec telling you that you have signed up for either a monthly, quarterly or annual reporting period. So we are going to choose yearly. This is probably more common for smaller businesses. The reporting method is always going to be the accrual method. There is a very tiny number of cases where it is the cash method. So let's just choose the accrual method. Here you're going to enter your GST number. This will also be available on the form that you received from Revenue Quebec when you signed up, as well as the QST number. The GST number will always end in RT triple zero, usually one, but depending on the number of businesses you have, that could be different. And the QST number will always end in tq001. You can enter this here now or you can enter it later. So we're just going to click on next.
And now that's pretty much it. You are set up. So let's click on ok.
And you'll notice here in taxes now you will see a box that says Revenue Quebec. If you had entered any other province, this would say Revenue Canada Agency or cra. So if you want to change anything else, you would go to manage sales tax. Some things are set. It gives you the option of five tax codes that every business needs.
Which includes just the qst.
It's rare that a transaction only has QST on it. Gst, qst, qc. So this is the one tax code that you will be using most often on your invoices, bills and expenses. Exempt is when taxes do not apply to a certain transaction such as bank charges or interest gst. There are some purchases or sales depending that only have GST on them. And then there's zero rated, which is similar to exempt and something that I will explain in a future tutorial. However, you can either use exempt or zero rated.
It's not a big deal, especially for small businesses.
Now if you have taxes in another province, which means you make sales to businesses in other provinces, then you would charge GSTHST based on the province in which your customer is located. So let's say we have a customer located in Ontario. We click on this, start tracking in a new province, click on Add.
And choose a province or territory. We're going to choose Ontario and this and click on Add.
You can follow a similar method to add the different provinces as they arise, either as a customer or as a supplier.
So now let's look at how this works in practice. Click on Done and your sales tax setup is complete. So now let's click on an invoice.
And see what taxes are available to us. In practice, we are going to add a new customer which we can do directly from here. And let's go call the company name Moriarty Inc. And you can enter all of the other details here or within the customer tab which is under Transactions or sales. So click on save, it will show up. You can enter the email address and the billing address again as part of the customer setup. So now let's say we are.
Selling more already some surveillance equipment or sell a quantity of one. The rate of it is $500. And now you'll see with respect to sales tax, you have two different options. First of all, amounts are exclusive of tax and this means you are going to add the tax to the invoice amount. So you click on sales tax, click on the drop down and because Moriarty link is located in Ontario, we are going to charge them 13%. It automatically calculates 13% which is $65 and it gives you the total of $565. Alternatively, we might only charge them $500, but this actually includes the tax. In that case, you can enter the amount of $500 and QuickBooks will work backwards and calculate the tax of 13% of HST on this amount. Once this is done, it automatically assigns the invoice number. The third option is out of scope tax. Out of scope tax means no taxes or are charged on this invoice. So you can either select that from here or you can simply select exclusive of tax and choose exempt or out of scope. If no taxes apply, perhaps Moriarty Inc. Is located in a country other than Canada and therefore you do not have to charge them tax. Once this is done, we can save and send it, save and close it all subjects for a future tutorial and then we save and close and you'll note that this drop down will be available in all transactions. So you'll see it here. We're in an expense transaction and you have the drop down here so you can choose the taxes that apply to that transaction.
One final thing to note is that when we come back to our taxes tab, you'll notice an amount of 5,752 which corresponds to the invoice that we just created for Moriarty Inc. As you enter in more invoices and more expensive expenses, this total will change and it will reflect the amount that you owe which is will be positive or in the case of sales taxes on expenses exceeding the amounts that you collected. This will show up as a negative and will actually be a refund. And that concludes our tutorial on setting up sales taxes. QuickBooks Online. I hope this is helpful. Please like subscribe and if you would like to see future videos of this nature, please leave a comment with a question about the video that you would like to see and I will try and set it up. Have a great day.
