QST Harmonization: Application of GST/HST and QST to Mutual Fund Trailing Commissions
Following our March 2026 tax update regarding the Canada Revenue Agency’s (CRA) announcement on the application of GST/HST to trailing commissions paid to mutual fund dealers, Revenu Québec confirmed in April 2026 that the Québec Sales Tax (QST) regime will be harmonized with these changes.
Background
In February 2026, the CRA published Notice 344, which changes how GST/HST applies to trailing commissions paid to mutual fund dealers. As a result of regulatory amendments adopted by the Canadian Securities Administrators (CSA), services rendered in exchange for trailing commissions are now considered taxable supplies subject to GST/HST rather than exempt financial services. This change takes effect on July 1, 2026.
Revenu Québec Confirms QST Harmonization
Revenu Québec has confirmed that, since the QST regime is similar to the GST/HST regime in this respect, this tax treatment will also apply under the QST regime. Accordingly, a mutual fund dealer who receives a trailing commission in consideration for a service rendered in respect of a mutual fund will be required to charge, collect and remit QST, in addition to GST/HST, in respect of that service.
Registration Requirement
This announcement may create an obligation for certain dealers to register for GST/HST and QST purposes, if they have not already done so. Affected persons may also be entitled to claim input tax credits (ITCs) and input tax refunds (ITRs) in respect of GST/HST and QST paid on expenses incurred in the course of providing these services.
Steps to Ensure Compliance
Affected dealers and advisors in Québec must ensure that GST/HST and QST are applied, collected, and remitted on supplies of services made in exchange for trailing commissions as of July 1, 2026. Specifically, they should:
Verify whether their business is registered for GST/HST and QST purposes, or is required to be, in light of the new taxable supplies; and
Update their billing systems to collect the applicable GST/HST and QST on trailing commissions.
Contact Information
For further information regarding the changes described in this tax update, or to discuss your particular situation, please contact Catherine Bouchard, Jordan Laforest-Claveau or your Forvis Mazars advisor directly.
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