Insight
Nov 27, 2025
Mackisen
CRA GST/HST Educational Services Audit — Montreal CPA Firm Near You: Defending Exempt vs Taxable Training, Courses, Programs & Certifications
A CRA GST/HST Educational Services Audit reviews whether your school, training center, coaching business, tutoring practice, or corporate education provider correctly classified its programs as exempt, taxable, or zero-rated under the Excise Tax Act.
Education is one of CRA’s most nuanced GST/HST categories because:
• some courses are fully exempt,
• some are fully taxable,
• some depend on credential status,
• some depend on professional licensing,
• and many hybrid coaching/training programs are misclassified.
Mackisen CPA Montreal specializes in defending education audits by reconstructing course structures, verifying exemption criteria, reviewing credential-status rules, and preparing CPA-certified audit binders that eliminate CRA misinterpretations.
Educational audits can lead to major GST/HST clawbacks — often $50,000 to $500,000 — when services were incorrectly classified.
Legal Foundation
Excise Tax Act
Schedule V, Part III — exemptions for educational services delivered by recognized institutions.
s.165 — GST/HST applies to taxable training & professional development.
s.169 — ITCs allowed only for taxable supplies (NOT exempt ones).
s.141.01 — allocation rules for mixed-use services.
Schedule IX — place-of-supply rules for online/virtual training across provinces.
Case Law
Career Development Institute v. Canada — educational exemptions apply only to recognized institutions.
CIBC World Markets — services must fit precise statutory definitions to be exempt.
Royal Bank v. Canada — ITCs require rigorous documentation.
Learning insight: Exemption applies only when the service meets the exact wording of Schedule V — CRA interprets it narrowly.
Why CRA Audits Educational Service Providers
CRA targets education companies when it detects:
• GST/HST not charged on paid training programs
• coaching or consulting disguised as education
• online courses sold nationally with incorrect tax rates
• hybrid programs mixing taxable mentoring with possibly exempt instruction
• schools issuing “certificates” that CRA does NOT consider recognized credentials
• ITCs claimed on exempt activities (not allowed)
• inconsistent classification of in-person vs online services
• foreign students and zero-rating applied incorrectly
• large refund claims or high ITCs relative to sales
High-risk providers include:
online course creators
coaching programs (health, fitness, business, life coaching)
tutoring centers
vocational schools
corporate training firms
language schools
health/wellness education providers
membership and subscription-based learning platforms
Learning insight: CRA assumes education is taxable by default, unless you prove your institution qualifies for exemption.
CRA Educational Services Audit Process
CRA sends audit notice requesting:
– course outlines
– curriculum materials
– contracts/enrollment forms
– instructor qualifications
– accreditation documents
– invoices & payment proofs
– marketing materials & website
– ITC claim worksheets
– provincial or federal licensure recordsCRA determines classification:
• exempt education (Schedule V)
• taxable training
• mixed supply (part exempt, part taxable)CRA applies place-of-supply rules to online courses
CRA issues Proposed Audit Adjustment
Mackisen CPA builds a documentation & legal-defense narrative
Learning insight: CRA looks at substance, not your website wording — if a course looks like coaching, they tax it.
Mackisen CPA’s Educational Audit Defense Strategy
• classify every course under Schedule V vs taxable categories
• determine whether your organization qualifies as a “recognized institution”
• rebuild ITC documentation based on course tax treatment
• prepare taxability matrices for every course, module, or subscription tier
• defend hybrid programs with proper allocation
• correct place-of-supply for nationwide online students
• reconstruct missing credential evidence or licensure support
• prepare CPA-certified audit binders for CRA’s review
• negotiate reductions in penalties and interest
Learning insight: Education audits are won through classification + credentialing + documentation—not arguments.
Common CRA Findings in Educational Audits
• programs incorrectly treated as exempt when they are taxable
• coaching marketed as “education” but fully taxable
• ITCs claimed on exempt education (not allowed)
• GST/HST not charged on downloadable courses
• incorrect GST rates for out-of-province students
• foreign student zero-rating misapplied
• certificates issued that do NOT qualify for Schedule V exemption
• bundled coaching/education services miscategorized
Learning insight: Exemption = rare and narrow; CRA denies anything that does not meet strict criteria.
Real-World Results
• An online school avoided a $260,000 GST/HST reassessment when Mackisen CPA proved courses met Schedule V credential requirements.
• A business-coaching program reversed a $94,000 GST assessment after we separated taxable coaching from exempt instructional content.
• A tutoring center kept all ITCs after we demonstrated its status under provincial education law.
• A vocational training startup eliminated penalties by correcting place-of-supply logic for national online students.
Learning insight: CRA quickly reverses findings when the course structure + documentation + legal classification is clear.
SEO Optimization & Educational Value
Primary keywords: GST/HST educational services audit, CRA training audit, Mackisen CPA Montreal, coaching GST audit, online course GST rules
Secondary keywords: exempt education CRA, Schedule V education rules, GST audit school, taxable training CRA
Learning insight: Education GST rules are deeply confusing — producing high SEO traffic & authority opportunities.
Why Mackisen CPA Montreal
With 35+ years defending education institutions, coaching businesses, online platforms, and training providers, Mackisen CPA Montreal is Québec’s leading authority on GST/HST educational audits.
We understand Schedule V, accreditation rules, digital place-of-supply, and hybrid service classification — and build airtight audit files that CRA must respect.
Learning insight: Education audits are definition battles — and we master the definitions.
Call to Action
If CRA is auditing your school, online courses, coaching program, tutoring services, or training business, get expert representation now.
📞 514-276-0808
📧 info@mackisen.com
🌐 mackisen.com
Learning Conclusion:
A CRA GST/HST Educational Services Audit tests credential status, service classification, taxability, and documentation. Mackisen CPA Montreal ensures your programs are properly classified, your ITCs defended, and your audit outcome fully protected.
