Quebec Agency + Consultancy Chart of Accounts for Xero (Free)

A Quebec agency’s ledger is a services ledger with two recoverable taxes flowing through it, which means the money mostly washes and the craft is in the edges: which contractor billed which tax, which client’s province writes the invoice, and the two accounts where recovery genuinely stops. This Xero chart of accounts encodes those edges.

People: three billing patterns, one account

Freelancer and contractor costs defaults to QC - GST/QST on Purchases for local registered contractors, whose 14.975% recovers fully. The custom GST-only rate records rest-of-Canada contractors outside QST registration, and Out of Scope records small suppliers. Three legitimate patterns, one account, one onboarding habit: registration status, both taxes, noted per contractor. Pass-through media and ad spend keeps client-billed platform money separate, with the per-platform recovery story visible per campaign.

Clients: the map writes the rate

Services income defaults to the pair for Quebec clients, both numbers printed on every invoice, with the seeded provincial rates covering the rest of the country and Zero Rated the export clients. Place of supply follows the client for location-independent work, so the account’s alternatives column is effectively the client roster’s tax column. Retainers keep the standard timing, tax at the earlier of invoice and payment, so deferred revenue stays visible.

Where recovery stops

• Meals and entertainment: the stereo 50% cut, half the ITC and half the ITR, on every pitch lunch.
• Club memberships: zero recovery under either tax, in quarantine in the base chart.
• Professional liability insurance: exempt from both, carrying Quebec’s premium tax at the QST-harmonized rate as cost.
• Home office costs: out of scope; the claim happens on both income tax returns, federal and Quebec.

The software stack, unlike BC’s, is friendly territory: subscriptions carry the pair with full recovery, the note handling foreign vendors under GST simplified regimes or Quebec’s remote-vendor QST rules, either fixed by registering your numbers.

Standing it up

1. Create the four custom rates (Tax menu, Tax settings, Tax rates), then import via Accounting, Chart of accounts, Import.
2. Add both registration numbers to the invoice template before the first Quebec invoice leaves.
3. Keep the contractor roster annotated with registration status; review it quarterly.
4. Rebills take your service’s tax treatment on the rebill line; true pass-through disbursements are the one-time accountant question worth settling before the first mixed invoice.
5. Reconcile the single combined liability to the Revenu Quebec return each period, sweeping the meals line for stereo overclaims before anything files.

Quebec’s generosity to creative industries arrives through a different pipe than the consumption taxes, and the books should keep the pipes apart. Refundable credits for multimedia, production, and similar work are income-tax events claimed through the corporate return; the costs underneath them code normally in this chart, at the pair with their ordinary recoveries, and any credit received books as its own income line rather than as a reduction of the costs. Blending credits into cost accounts flatters margins, confuses the GST/QST recoveries, and gives next year’s credit application dirty inputs.

Studios subcontracting to other agencies stay inside the same grammar: white-label work between registered practices is taxable services in both directions, invoiced with both numbers, recoverable on the paying side.

Agency paper is constant and small, and dual-tax judgment calls compound at that scale. Hubdoc captures and files the stream. ExpenseFlow reads each invoice, applies the three contractor patterns and the client-province map this chart encodes, keeps the stereo half-recovery where it belongs, and posts coded entries into Xero. Dext rules the recurring stack.

The QuickBooks build is at Quebec agency chart of accounts for QuickBooks; rates are documented in the Quebec Xero tax rates reference.