CRA GST/HST Cleaning, Janitorial & Maintenance Services Audit — Montreal CPA Firm Near You: Defending Service Classification, Subcontractors, Supplies & ITCs

A CRA GST/HST Cleaning & Janitorial Services Audit targets businesses providing commercial cleaning, residential cleaning, janitorial contracts, specialty sanitation, post-construction cleanup, hotel housekeeping outsourcing, and industrial maintenance services.

This industry is heavily audited because it involves:
• service-only supplies (fully taxable)
• subcontractor-heavy structures
• high-volume small invoices
• B2B and B2C mixed clients
• inconsistent GST/HST application for travel charges, supplies & add-ons
• equipment ITCs (vacuums, polishers, chemicals, PPE, uniforms)
• Cash-heavy residential jobs
• multi-province cleaning contracts

Mackisen CPA Montreal specializes in defending cleaning service audits by reconstructing GST/HST logic, validating subcontractor registration, rebuilding ITC documentation, and preparing CRA-compliant audit binders.

Legal Foundation

Excise Tax Act

• s.165 — all cleaning, janitorial & maintenance services are fully taxable

• s.221 — supplier must collect GST/HST

• s.169 — ITC eligibility rules

• s.141.01 — allocation for mixed-use expenses

• Schedule IX — place-of-supply rules for out-of-province jobs

• s.123(1) — “service”, “consideration”, “commercial activity” definitions

Case Law

• Royal Bank v. Canada — strict invoice documentation required

• General Motors — classification must follow economic substance

• Northwest Company Inc. — invalid invoices = ITC denial

• CRA administrative rulings for cleaning, sanitization & maintenance services

Learning insight: Cleaning & janitorial services never qualify for exemptions — CRA audits focus on documentation and accurate billing.

Why CRA Audits Cleaning & Janitorial Companies

CRA flags cleaning service providers when it detects:

Revenue Risks

• GST/HST not charged on residential or commercial cleaning
• travel fees or supply fees not taxed
• subcontracted work billed incorrectly
• deposits collected but not remitted
• in/out-of-province clients taxed incorrectly
• inconsistent invoicing (cash vs invoice)

Subcontractor Risks

• subcontractors lacking valid GST/HST registration
• worker misclassification (employee vs subcontractor)
• incomplete subcontractor invoices
• T4A or T5018 mismatches with GST filings

ITC Risks

• cleaning product purchases with missing documentation
• equipment acquisitions (vacuums, floor machines) missing invoices
• ITCs claimed on personal-use supplies
• protective gear, uniforms & PPE incorrectly allocated

Operational Risks

• cash jobs not fully reported
• travel time billed without GST/HST
• multi-unit building contracts with wrong place-of-supply tax
• supply fees classified incorrectly

High-risk companies:

• commercial janitorial companies

• construction cleanup firms

• residential maid services

• hotel housekeeping contractors

• carpet & upholstery cleaners

• disinfecting, sanitizing & specialty cleaners

Learning insight: CRA assumes cleaning companies undercharge GST/HST and overclaim ITCs unless proven otherwise.

CRA Cleaning & Janitorial Audit Process

1. CRA requests:
   – service contracts
   – invoices to clients
   – subcontractor invoices
   – GST/HST numbers for subcontractors
   – product & supply invoices
   – equipment purchase receipts
   – mileage & travel logs
   – bank statements
   – T4A/T5018 summaries
   – ITC worksheets
   – GL & financial statements

2. CRA tests:
   • GST/HST applied to all cleaning services and add-ons
   • place-of-supply for out-of-province contracts
   • validity of subcontractor invoices
   • ITC support (invoice + proof of payment)
   • personal-use purchases disguised as business expenses
   • travel time/fees classified properly
   • double billing or non-reporting of cash transactions
   • GST treatment for supplies provided to clients

3. CRA issues the Proposed Audit Adjustment.

4. Mackisen CPA builds a complete legal-tax documentary defense file.

Learning insight: CRA audits cleaning companies using pattern matching, comparing industry ratios and uncovering inconsistencies in invoices and payroll.

Mackisen CPA’s Cleaning Industry Audit Defense Strategy

• reconstruct service tax logic: labour, travel, supplies, equipment rentals
• prepare a Service Taxability Matrix
• validate subcontractor GST/HST registration numbers
• rebuild ITC binder with invoices & proof of payment
• separate personal vs business-use supplies & equipment
• reconcile invoices → deposits → GST filings
• defend travel & mileage billing classification
• correct place-of-supply for multi-province service delivery
• reconstruct T4A/T5018 compliance
• prepare CRA-standard CPA-certified audit binder
• negotiate penalty and interest relief

Learning insight: Cleaning audits are won with clean evidence, not verbal explanations.

Common CRA Findings in Cleaning & Janitorial Audits

• GST/HST not charged on:
– labour
– travel fees
– supply fees
– surcharge/extra cleaning
• ITCs denied for missing or invalid invoices
• subcontractors using invalid GST numbers
• cash sales underreported
• equipment purchases lacking documentation
• fuel/mileage expenses misclassified
• GST/HST rate errors for out-of-province clients
• double-claimed expenses
• residential cleaning incorrectly treated as exempt (never exempt)

Learning insight: Most reassessments result from invoice defects + subcontractor errors.

Real-World Results

• A janitorial company avoided a $310,000 reassessment after Mackisen CPA validated subcontractor GST numbers and rebuilt invoice documentation.
• A construction cleanup firm reversed a $128,000 ITC denial when we reconstructed supply & equipment invoices.
• A residential cleaning service eliminated penalties by proving GST/HST should have been charged but corrected filings voluntarily.
• A specialty sanitization company cleared CRA findings through proper classification of out-of-province contracts.

Learning insight: CRA retreats quickly when faced with structured, CPA-certified evidence.

SEO Optimization & Educational Value

Primary keywords: GST/HST cleaning audit, CRA janitorial audit, cleaning service GST rules, Mackisen CPA Montreal
Secondary keywords: ITC denial cleaning, subcontractor GST audit, travel fee GST Canada, residential cleaning GST

Learning insight: Cleaning & janitorial audit topics generate strong SEO results due to industry confusion and high audit frequency.

Why Mackisen CPA Montreal

With 35+ years defending cleaning companies, janitorial contractors, and maintenance service providers, Mackisen CPA Montreal is Québec’s leading authority on GST/HST audits for the cleaning industry.
We understand service classification, subcontractor compliance, ITCs, and CRA audit expectations in this sector deeply.

Learning insight: Cleaning audits demand documentation precision + subcontractor verification + tax logic — all strengths of Mackisen CPA.

Call to Action

If CRA is auditing your cleaning service, janitorial contracts, maintenance company, or subcontractor structure, contact Mackisen CPA Montreal immediately:

📞 514-276-0808
📧 info@mackisen.com
🌐 mackisen.com

Learning Conclusion:

A CRA GST/HST Cleaning & Janitorial Services Audit tests service taxability, subcontractor compliance, invoice quality, ITC documentation, and place-of-supply.
Mackisen CPA Montreal ensures your entire cleaning operation is fully defended and protected from costly reassessments.