What is the tax in Quebec? A Comprehensive Guide for Quebec Residents

You would have a fair idea that each province in Canada has its own tax system. Out of the 10 provinces, Quebec has the most unique tax system. Quebec administers its own income tax system in addition to the federal taxes.

For accurate filing, it is essential to understand Quebec taxes. They apply to salaried employees, self-employed professionals, and business owners. This guide would be super informative for you. You will get to know about what the tax is in Quebec, including income tax, sales tax, different payroll deductions, and business taxes.

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Understanding The Basics Of The Quebec Tax System

Canada follows a federal-provincial tax system. But the tax system in Quebec is different. Quebec residents must file –

• A federal tax return with the Canada Revenue Agency (CRA)
• A provincial tax return with Revenu Quebec

Quebec has its own income tax, both personal and corporate, making it the only province in Canada with such a dual filing system.

It can get overwhelming to comply with the rules and regulations of Quebec taxes. That’s why we recommend you get in touch with a professional. And who better than Taxccount Canada. Our experienced team will help you understand the Quebec taxes for personal and corporate income tax.

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Quebec Personal Income Tax

Many people who are new to Quebec province might not be aware that Quebec uses a progressive income tax system. This means that the income tax rates increase as your income increases.

Some of the key features of Quebec Income Tax are –

• It is separate from federal income tax.
• It is collected by Revenu Quebec.
• It is applied based on your income level.
• It includes provincial tax credits and deductions.

Generally, Quebec income tax rates are higher than those of other provinces in Canada. But, in return, the residents of Quebec get a wide variety of social programs and benefits that are funded by these taxes.

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Taxable Income In Quebec

Quebec residents may be taxed on various income sources, including the following –

• Employment income (both salary and wages)
• Self-employment income
• Investment income
• Rental income
• Pension income
• Certain foreign income

Your province of residence as of December 31 is the deciding factor whether you pay Quebec tax or not.

For more details on understanding these, you can get in touch with Taxccount Canada, and our team would be happy to guide you.

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Quebec Tax Credit And Deductions

There are several refundable and non-refundable tax credits in Quebec. These can help you reduce your overall tax burden.

The most common Quebec tax credits are –

• Basic personal amount
• Work premium tax credit
• Solidarity tax credit
• Payments for child assistance
• Tuition and education credits
• Caregiver and disability credits

When these credits are properly implemented, they can significantly lower the amount of provincial tax that you owe.

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Quebec Sales Tax

From personal income tax to now, moving on to Quebec Sales Tax (QST), the provincial tax of Quebec.

• QST rate – 9.975%
• It is applied to most goods and services
• It is charged in addition to 5% federal GST

QST is different from other provinces that charge HST. Quebec charges QST in addition to the GST-inclusive price, which increases the final cost as compared to other provinces.

The most common items that are subject to QST are –

• Retail goods
• Professional services
• Digital subscriptions
• Restaurant meals
• Prepared and ready-to-eat food

Items on the exempt list are –

• Basic groceries
• Prescription drugs
• Educational services
• Certain specific medical services

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Quebec Payroll Taxes And Deductions

For those who work or are employed in Quebec, it is important to understand the payroll deductions of the tax system.

Common Quebec Payroll Deductions

• Quebec Pension Plan (QPP)
• Employment Insurance (EI)
• Quebec Income Tax
• Quebec Parental Insurance Plan (QPIP)
• Health Services Fund (this one is for employers)

In Quebec, both employees and employers have to contribute to some of these programs, making payroll management slightly more complex than in other provinces. To know details about any of these programs or Quebec payroll deductions, Taxccount Canada is your one-stop solution.

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Quebec Taxes For Self-Employed Individuals

If you are self-employed in Quebec, then you have additional tax responsibilities, which include –

• File both federal and Quebec tax returns
• To pay Quebec income tax
• Contribute to Quebec Pension Plan (QPP) and Quebec Parental Insurance Plan (QPIP)
• Register for both GST and QST if your annual revenue exceeds $30,000
• Make instalment payments if required

Self-employed professionals have the facility to deduct eligible business expenses like home office costs, vehicle expenses, ads, and professional fees.

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Quebec Corporate Taxes

For corporations operating in Quebec, two taxes need to be paid –

• Federal corporate income tax (as per the Canada Revenue Agency)
• Quebec corporate income tax (filed with Revenue Quebec)

The Key Features Of The Corporate Tax Structure Are –

• Tax rates are lower for small businesses.
• Tax rates are higher for general and large corporations
• Additional payroll-related contributions may apply.
• Corporations may also need to separately file GST and QST returns, depending on their business activities.

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Filing Deadlines In Quebec

It is important to meet tax deadlines in Quebec to avoid any penalties and interest.

Important dates that you should keep in mind –

• Person tax return – April 30th
• Self-employed professionals – June 15th (payment is still due on April 30th)
• Corporate tax return – 6 months after the fiscal year-end
• GST/ QST returns – can be monthly, quarterly, or annually

Late filing can result in fines and interest charges by both CRA and Revenu Quebec, so keep a tab on the dates and let a professional like Taxccount Canada handle your tax returns seamlessly and easily.

This is general information only and not professional advice. Consult a professional before acting.