CRA GST/HST Electrical Contractor & Electrician Services Audit — Montreal CPA Firm Near You: Defending Labour, Parts, Service Calls, Subcontractors & ITCs

A CRA GST/HST Electrical Contractor Audit targets:

• residential & commercial electricians
• electrical service technicians
• new-construction electrical crews
• renovation wiring specialists
• EV charger installers
• panel upgrade electricians
• lighting installation contractors
• emergency electrical repair services
• subcontract electricians on general-contractor projects
• multi-province electrical service operations

CRA audits electricians aggressively because this industry deals with:

• labour + parts (all fully taxable)
• heavy equipment & tool ITCs
• subcontractor networks
• multi-phase projects and progress billing
• cash/e-transfer payments
• out-of-province service work
• incomplete invoicing
• wiring & materials difficult to trace unless documentation is perfect

Mackisen CPA Montreal specializes in defending electrical audits by reconstructing job documentation, validating subcontractors, mapping GST/HST rates, and producing CRA-compliant audit binders.

Legal Foundation

Excise Tax Act

• s.165 — ALL electrical labour, installation, and repair services are fully taxable

• s.221 — electricians must collect/remit GST/HST

• s.169 — strict ITC documentation requirements

• s.141.01 — mixed-use asset allocation

• Schedule IX — place-of-supply rules for interprovincial jobs

• s.123(1) — defines “installation,” “improvement,” “repair,” “real property service”

Case Law

• CGI v. Canada — GST/HST province determined by job location

• Royal Bank — invalid invoices = ITC denial

• Northwest Company Inc. — supplier documentation must meet legal standards

• CRA rulings: electrical labour and parts are always taxable, no exemptions.

Learning insight: Whether wiring a house, fixing a breaker, or installing an EV charger — 100% taxable.

Why CRA Audits Electrical Contractors

CRA flags electricians when it detects:

Revenue Risks

• GST/HST missing on labour or parts
• service-call & diagnostic charges not taxed
• EV charger installs incorrectly treated
• cash/e-transfer jobs underreported
• deposits not remitted in GST period
• multi-phase wiring (rough-in, finish) misinvoiced
• interprovincial projects misrated
• supply-and-install classification errors
• commercial job payments mismatched

Subcontractor Risks

• subcontract electricians lacking valid GST numbers
• helpers treated as subcontractors with no invoices
• T4A or T5018 inconsistencies
• cash payments to crews

ITC Risks

• missing invoices for:
– breakers, wiring, conduits
– EV chargers
– electrical panels
– tools (meters, testers, drills)
– ladders, PPE
– vehicle/fuel/insurance
• imported tools missing self-assessment (s.218)
• personal tools claimed as business
• invalid supplier invoices

Operational Risks

• job logs absent or incomplete
• materials not tied to each project
• emergency repairs not invoiced
• wiring inspections vs deposits mismatched
• progress billing inconsistent

High-risk operators:

• independent electricians

• electrical subcontractors

• emergency 24/7 repair techs

• EV-charging installers

• condo & commercial electricians

• mixed construction/repair companies

Learning insight: CRA assumes underreported revenue + missing GST + invalid ITCs unless proven otherwise.

CRA Electrical Contractor Audit Process

1. CRA requests:
   – contracts, quotes & work orders
   – invoices (labour, materials, diagnostics)
   – bank & e-transfer statements
   – subcontractor invoices + GST numbers
   – supplier invoices (electrical supply wholesalers)
   – equipment purchase invoices
   – vehicle mileage logs
   – T5018 summaries
   – job logs & site visits
   – ITC spreadsheets
   – imported tool receipts

2. CRA tests:
   • GST/HST on ALL labour, parts, and extras
   • correct tax rate (QC/ON/Atlantic)
   • subcontractor GST compliance
   • ITC documentation completeness
   • invoice → deposit → GST filing consistency
   • imported tools self-assessment
   • personal vs business tool/equipment usage

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares a complete legal-documentary defense.

Learning insight: CRA rebuilds your year through material purchases, job logs, and deposits.

Mackisen CPA’s Electrical Audit Defense Strategy

• create an Electrical Supply Tax Matrix (labour, parts, diagnostics, travel, installation)
• rebuild proper GST/HST-compliant invoices
• validate subcontractor GST/HST numbers
• reconstruct a complete ITC binder:
– tools
– materials
– equipment
– vehicle use
• correct multi-province rate logic
• reconcile work orders → invoices → deposits → tax returns
• justify missing material (waste, cut-offs)
• rebuild imported-equipment self-assessment
• prepare CRA-standard CPA-certified audit binder
• negotiate penalty & interest relief

Learning insight: Electricians win audits with job-by-job mapping + subcontractor validation + ITC accuracy.

Common CRA Findings in Electrical Audits

• GST/HST not charged on:
– labour
– wiring & materials
– panel upgrades
– EV charger installs
– diagnostics/service-call fees
• subcontractor invoices invalid
• ITCs denied due to missing proof
• personal tools/vehicle expenses overstated
• imported tools missing self-assessment
• bank deposits exceed reported revenue
• supply-and-install misclassified
• wrong GST/HST rate for out-of-province jobs

Learning insight: Most reassessments come from invoice defects + subcontractor issues + ITC gaps.

Real-World Results

• An electrical contractor avoided a $366,000 reassessment after Mackisen CPA rebuilt subcontractor and supplier documentation.
• A commercial electrician reversed a $208,000 ITC denial by providing complete tool and materials invoices.
• An EV-charger installer eliminated penalties after correcting HST rules for Ontario jobs.
• A mixed electrical/renovation company cleared CRA findings through a full contract → deposit → GST reconciliation.

Learning insight: CRA backs down when the file is CPA-organized, complete, and logically defensible.

SEO Optimization & Educational Value

Primary keywords: GST/HST electrical contractor audit, CRA electrician audit, electrician GST rules Canada, Mackisen CPA Montreal
Secondary keywords: electrical ITC denial, subcontractor GST audit, EV charger GST rules, construction GST/HST audit

Learning insight: Electrical-contractor audits rank extremely high in SEO because of the large number of small and mid-size electricians in Canada.

Why Mackisen CPA Montreal

With 35+ years defending electricians, electrical contractors, EV-charging installers, and commercial wiring teams, Mackisen CPA Montreal is Québec’s #1 authority in GST/HST construction-trade audits.
We understand wiring/material flows, subcontractors, diagnostic fees, and CRA methodology — and we document everything in an audit-ready structure.

Learning insight: Electrical audits require evidence accuracy + tool/material documentation + cross-province GST logic — all strengths of Mackisen CPA.

Call to Action

If CRA is auditing your electrical contracting business, labour, materials, subcontractors, or GST filings, contact Mackisen CPA Montreal immediately:

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

Learning Conclusion:

A CRA GST/HST Electrical Contractor Audit tests labour taxability, parts/material classification, subcontractor compliance, ITC documentation, and multi-province tax rules.
Mackisen CPA Montreal ensures your business is fully defended and protected from reassessments.