How to Configure Quebec Sales and Purchase Taxes in NetSuite?

Verify or Create the Quebec Nexus.The first step is to confirm if the Quebec nexus already exists. If it does not, it must be created.Path: Setup > Accounting > Nexuses

Pair the Nexus to Appropriate Subsidiaries.Assign the newly created nexus to the relevant subsidiaries. It is critical to note that subsidiaries are not necessarily required to remit taxes in the same tax jurisdictions (tax nexuses). Once a nexus is assigned to a subsidiary, it cannot be removed, so confirm with stakeholders which subsidiaries should remit taxes in the newly created nexus. This step can be completed last if confirmation is pending.Path: Setup > Company > Subsidiaries

Create a Tax Control Account for Purchases in the Quebec Nexus.NetSuite typically sets up the tax account on purchase in Quebec as an expense account. However, taxes on purchases are reclaimable in Quebec, meaning the account must be an asset account, not an expense account. To achieve this, generate a new account through the Tax Control Accounts screen, and NetSuite will create it as an asset.Path: Setup > Accounting > Tax Control Accounts > NewWhen creating the account, ensure the QC nexus is selected and verify the account type is correctly set as an asset.

Review and Update Quebec Tax Codes.While NetSuite presets tax codes/groups upon nexus creation, these must be reviewed and updated to ensure accuracy. NetSuite does not automatically set the proper tax rate or the correct purchase tax account for PST (QST).Path: Setup > Accounting > Tax CodesThe default tax code may show an outdated rate, such as 6.5, and an incorrect purchase tax account type. Update the tax code with the correct values, ensuring to select the purchase tax account that was created in the previous step (the asset account, as opposed to an expense account).

Update Tax Schedules.Update the tax schedules to dictate the tax treatment in the new nexus across all relevant tax schedules.Path: Setup > Accounting > Tax SchedulesThis includes updating both taxable and non-taxable schedules to reflect the Quebec nexus.

Run a Test Transaction.Perform a test to ensure that the taxes are set up properly.Choose an item with a taxable schedule.Choose a client in a subsidiary to which this nexus has been assigned, and ensure they have an address in Ontario.Create a sales order with this item, customer, and ship-to address combination and confirm the taxes are appropriately allocated.