CRA GST/HST Driving School & Driver Training Audit — Montreal CPA Firm Near You: Defending Course Fees, In-Car Instruction, Theory Classes & ITCs

A CRA GST/HST Driving School & Driver Training Audit targets businesses offering driver education, including:
• driving schools
• in-car driving instructors
• theory/classroom driving courses
• SAAQ-accredited driver training
• commercial truck training (Class 1/A)
• motorcycle training
• defensive driving & corporate driver safety programs
• fleet training
• online driver education modules

Driving schools are heavily audited due to confusion about exempt vs taxable courses, high instructor payroll/subcontractor use, and complex multi-component training packages.

Mackisen CPA Montreal specializes in defending driver-training audits by classifying education components, reconciling revenue, and reconstructing ITC documentation.

Legal Foundation

Excise Tax Act

• Schedule V, Part III — Exempt Educational Services
  Only applies when BOTH conditions are met:

  1. The school is a recognized educational institution or

  2. The course leads to a certificate, diploma, or license required by law to practice a trade or vocation
     → Example: Driver training required for provincial driver’s licence may be exempt when provided by accredited institutions.

• s.165 — GST/HST on taxable supplies

• s.221 — obligation to collect GST/HST

• s.169 — ITC documentation rules

• s.141.01 — allocation of mixed-use expenses

• Schedule IX — provincial place-of-supply rules

Case Law

• Career Development Institute v. Canada — exemptions must meet strict statutory definition

• Chella — intention & accreditation matter

• Royal Bank v. Canada — ITCs denied for incomplete documentation

Learning insight: Only accredited/provincially-recognized driver training may qualify as exempt. Private, non-accredited driving instruction is fully taxable.

Why CRA Audits Driving Schools & Driver-Training Providers

CRA flags driving schools when it detects:

Revenue Risks

• GST/HST not charged on non-accredited lessons
• theory vs in-car instruction misclassified
• uncertified instructors providing “exempt” training
• mixed packages (theory + in-car) without proper tax allocation
• corporate fleet/safety training incorrectly treated as exempt
• online modules taxed incorrectly
• installment payments not tracked
• cash or e-transfer payments underreported

ITC Risks

• vehicles & fuel receipts missing invoice requirements
• insurance expenses misclaimed
• ITCs on personal-use vehicles
• training materials missing proper documentation
• instructor subcontractor invoices with invalid GST numbers
• classroom rentals ITCs lacking proof

Operational Risks

• number of lessons does not match revenue
• instructor logs vs reported income inconsistent
• SAAQ or provincial accreditation misunderstood
• promotional discounts or coupons incorrectly applied

High-risk training categories:

• non-accredited private driving schools

• motorcycle training programs

• online theory courses

• corporate driver safety training

• commercial truck driving training providers

• multi-province training operations

Learning insight: CRA focuses heavily on accreditation status — the difference between exempt and taxable.

CRA Driving School Audit Process

1. CRA requests:
   – student contracts & enrolment forms
   – accreditation documents (SAAQ, provincial ministry)
   – invoices & receipts
   – class schedules & theory logs
   – in-car instructor logs
   – payment records (cash, debit, e-transfer)
   – subcontractor instructor invoices
   – GST/HST numbers for instructors
   – expense invoices for vehicles, fuel, insurance, rent
   – ITC spreadsheets
   – online course platform data

2. CRA tests:
   • course exempt or taxable? (accreditation test)
   • classroom vs in-car allocation
   • subcontractor invoices compliant?
   • vehicle expenses valid for ITCs?
   • payments traced to GST/HST returns
   • out-of-province training taxed correctly
   • number of sessions vs revenue consistency

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares complete legal & documentary defense.

Learning insight: CRA audits the program structure, not just the invoices.

Mackisen CPA’s Driving School Audit Defense Strategy

• determine which services are exempt vs taxable
• build a Training Taxability Matrix (theory, in-car, exams, packages)
• reconstruct invoices with proper GST/HST logic
• validate instructor/subcontractor GST registration
• rebuild ITC binder with:
– fuel
– maintenance
– tires
– insurance
– vehicle lease/loan
– classroom costs
• reconcile student logs → payments → GST filings
• defend accredited exemptions with provincial documentation
• fix online course tax treatment
• prepare CRA-ready CPA-certified audit binder
• negotiate penalty/interest relief

Learning insight: Driving schools win audits with accreditation proof, clean logs, and organized ITC evidence.

Common CRA Findings in Driving School Audits

• GST/HST not charged on non-accredited training
• hybrid programs treated as exempt incorrectly
• subcontractor instructors using invalid GST numbers
• ITCs denied due to missing invoices
• fuel & vehicle expenses overstated
• payments not reconciling with lessons delivered
• online modules taxed incorrectly
• instructor logs inconsistent
• multi-province tax-rate errors

Learning insight: 90% of audit problems are classification errors + missing invoices.

Real-World Results

• A Montreal driving school avoided a $214,000 GST reassessment after Mackisen CPA proved accredited courses were exempt and separated taxable instruction.
• A truck-driver training school reversed a $172,000 ITC denial with reconstructed fuel and vehicle documentation.
• A motorcycle training company eliminated penalties after mapping taxable vs exempt courses.
• A multi-instructor driving school cleared CRA findings by reconciling logs with GST filings.

Learning insight: CRA backs down when accreditation + documentation + revenue mapping are CPA-certified.

SEO Optimization & Educational Value

Primary keywords: GST/HST driving school audit, CRA driver training audit, exempt driving course GST Canada, Mackisen CPA Montreal
Secondary keywords: in-car instruction GST, theory course GST rules, driving instructor GST audit, driver education ITC denial

Learning insight: Driving school taxation is widely misunderstood — excellent for SEO visibility.

Why Mackisen CPA Montreal

With 35+ years defending educational institutions, driving schools, commercial driver trainers, and hybrid online/offline programs, Mackisen CPA Montreal is Québec’s leading expert in GST/HST audits in the driver-training sector.
We understand accreditation laws, course structures, in-car service rules, and CRA methodology.

Learning insight: Driving school audits require classification accuracy + accreditation proof + documentation discipline — Mackisen excels at all three.

Call to Action

If CRA is auditing your driving school, training program, theory/in-car instruction, or ITC claims, contact Mackisen CPA Montreal immediately:

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

Learning Conclusion:

A CRA GST/HST Driving School Audit tests course classification, accreditation status, instructor compliance, ITC documentation, and multi-component program structure.
Mackisen CPA Montreal ensures complete defense and protection from costly reassessments.