The Quick Method of Accounting for Calculating GST and QST Remittances
The Quick Method of Accounting is a simplified accounting method designed to help registrants calculate the GST and QST they must remit to us.
Under the Quick Method, you collect GST and QST in the usual manner. However, you need not claim input tax credits (ITCs) and input tax refunds (ITRs) for your current operating expenses or purchases made in the course of your commercial activities, because the Quick Method takes them into account.
To calculate the partial amount of GST to remit, multiply the total taxable sales (including GST) you made in Canada by 1.8% or 3.6%, as applies to your situation. To calculate the partial amount of QST to remit, multiply the total taxable sales (including QST) you made in Québec by 3.4% or 6.6%, as applies to your situation.
If applicable, calculate the 1% rate reduction on the qualifying portion of your taxable sales and deduct these partial amounts from the tax to be remitted.
You must remit the resulting amounts for each reporting period.
In calculating your total sales, do not include:
- zero-rated sales;
- sales of real property and capital property;
- sales made to First Nations or to a provincial government (which does not pay GST or QST).
You can use the Quick Method regardless of whether you include the GST and QST in your sale prices or whether you list the taxes separately from the price. You are still required to keep all supporting documents concerning purchases and sales.
If you make taxable sales in participating provinces, the rates may vary depending on the location of your business, the province where you made the sales, the nature of the sales and whether or not you charged GST or HST on your taxable sales (excluding zero-rated sales). For more information, refer to the guide Quick Method of Accounting for GST/HST (RC4058) on the Government of Canada website.
As a user of the Quick Method, you cannot claim ITCs or ITRs for most business expenses (such as heating costs, lodging and telephone expenses). You can, however, claim ITCs and ITRs for acquisitions of land and property (such as a building, a vehicle or office furniture) that give entitlement to capital cost allowance (CCA) for income tax purposes. You can claim these ITCs and ITRs in your GST and QST returns for the period during which the purchases were made.
The portion of the taxes that is collected but not remitted using the Quick Method must be included in your income for income tax purposes.