Registration in the tax accounts

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A newly created corporation must register for different accounts with the Canada Revenue Agency and Revenu Québec.

A first account, which is mandatory for all corporations doing business in Canada, is the income tax account (file in Quebec). This account facilitates the filing of tax returns and should be opened immediately following incorporation. If the corporation is federally incorporated, a federal business number will be created and the federal tax account will be opened automatically. Registration in the Quebec tax file will not be automatic, however, and it will therefore be necessary to register with Revenu Québec, or else by registering the corporation with the Enterprise Registrar, which will result in the creation of a NEQ and the tax account. Similarly, a corporation incorporated under Quebec law will automatically be registered in the Quebec tax file, but federal registration will be required.

A company can also register for GST and QST. These are mandatory only if the company sells taxable supplies or services, and if total worldwide sales exceed $30,000 in a given quarter, or for all 4 quarters preceding that quarter. In practice, a company can register for GST and QST even if its total sales are below these amounts. A choice must be made by the company regarding the frequency of payment of the taxes collected: monthly, quarterly or annually. Depending on the annual amount of sales, annual or even quarterly payments may not be eligible. Finally, it should be noted that these two taxes are managed by Revenu Québec under an agreement with the Canada Revenue Agency, and that registration can therefore be done directly with Revenu Québec. Practice shows that registration for GST and QST with Revenu Québec also results in registration for federal income tax, even though no official policy exists on this subject.

If the corporation has employees to whom salaries are paid, registration in the federal source deduction account and the Quebec source deduction file will be required. There is no administrative agreement between Quebec and the federal government. Therefore, registration at each level of government will be required.

 

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