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.
For GST purposes, multiply the total taxable supplies (including GST) you made in Canada by the applicable rate, and for QST purposes, multiply the total taxable supplies (including QST) you made in Québec by the applicable rate.
If applicable, calculate the 1% rate reduction on the qualifying portion of your taxable supplies 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 supplies, do not include:
- zero-rated supplies;
- supplies of real property and capital property;
- supplies made to Indians 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 supplies.
If you make taxable supplies in participating provinces, the rates may vary depending on the location of your business, the province where you made the supplies, the nature of the supplies and whether or not you charged GST or HST on your taxable supplies (excluding zero-rated supplies). For more information, refer to the Canada Revenue Agency's guide Quick Method of Accounting for GST/HST (RC4058).
As a user of the Quick Method, you do not claim ITCs or ITRs for most business expenses (such as heating costs, rent 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.