CRA GST/HST Fitness, Gym & Wellness Club Audit — Montreal CPA Firm Near You: Defending Memberships, Classes, Personal Training & Mixed Health Services

A CRA GST/HST Fitness, Gym & Wellness Club Audit examines whether your fitness centre, gym, yoga studio, pilates studio, martial arts academy, bootcamp provider, personal training facility, or wellness club correctly charged GST/HST, classified programs, and claimed ITCs.

The fitness industry is one of CRA’s highest-audit sectors because it mixes:
• taxable fitness services (gym memberships, classes, PT)
• exempt health services (only by regulated practitioners)
• hybrid wellness programs
• nutrition advice (taxable)
• supplement sales (taxable)
• membership tiers with mixed supplies
• online & in-person classes
• training packages
• merchandise sales
• equipment ITCs
• studio rentals
• cash payments

Mackisen CPA Montreal specializes in defending gyms and wellness facilities by reconstructing service classifications, rebuilding ITC documentation, and preparing CRA-ready audit binders.

Legal Foundation

Excise Tax Act

• s.165 — GST/HST applies to taxable services

• Schedule V – Part II — exemptions for regulated health services only
  (physio, chiro, podiatry, massage with medical prescription, etc.)

• Schedule VI — zero-rating for specific health supplies

• s.169 — documentation requirements for ITCs

• s.221 — gyms must charge and remit GST/HST on memberships

• s.123(1) — defines “healthcare service,” “fitness service,” and “consideration”

Case Law

• Fitness Industry Association Case — fitness memberships are always taxable

• Honeywell — burden of proof lies with the taxpayer

• Royal Bank v. Canada — ITCs require strict documentation

• Massage Therapy Case — exempt only with proper referral/regulated status

Learning insight: Gyms & fitness centres are almost entirely taxable — only regulated therapeutic services can be exempt.

Why CRA Audits Gyms, Studios & Wellness Clubs

CRA flags fitness operations when it detects:

Revenue Risks

• gym memberships charged without GST/HST
• yoga/pilates classes incorrectly treated as exempt
• personal training services misclassified
• online classes taxed incorrectly
• class packs & memberships bundled incorrectly
• nutrition coaching treated as exempt (it is taxable)
• unreported cash payments
• corporate wellness contracts misapplied

Product & Service Risks

• supplement sales miscoded
• merchandise not taxed properly
• studio rentals misclassified
• mixed taxable/exempt services in wellness packages

ITC Risks

• equipment purchases without valid invoices
• renovations/leasehold improvements missing GST evidence
• personal trainer expenses misclaimed
• ITCs claimed on exclusive personal-use items

High-risk operations:

• traditional gyms

• CrossFit & bootcamp studios

• yoga/pilates studios

• martial arts schools

• personal training companies

• bodybuilding gyms

• health & wellness clubs

• weight-loss centres

• spin & HIIT studios

Learning insight: CRA assumes fitness services = fully taxable unless proven otherwise.

CRA Fitness & Wellness Audit Process

1. CRA requests:
   – POS reports & membership lists
   – class schedules & attendance logs
   – personal training agreements
   – corporate wellness contracts
   – online class platform data
   – invoices for equipment & renovations
   – supplement & merchandise invoices
   – bank statements
   – ITC documentation
   – payroll & contractor invoices

2. CRA tests:
   • correct GST/HST on memberships, drop-ins, PT
   • classification of taxable vs exempt services
   • supplement vs food (zero-rated) distinctions
   • allocation for hybrid programs (coaching + training)
   • accurate ITC documentation
   • unreported cash sales
   • cross-province online class rules

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares complete legal + documentary defense.

Learning insight: CRA examines membership tiers, package breakdowns, and class structures to ensure tax logic matches services.

Mackisen CPA’s Fitness Industry Audit Defense Strategy

• create a Service Tax Classification Matrix (taxable, exempt, mixed)
• rebuild ITC binder with invoices + payment proof
• correct GST/HST logic for:
– memberships
– drop-ins
– PT sessions
– hybrid training + nutrition programs
– online classes
– merchandise packages
• defend against CRA’s hidden-cash assumptions
• separate personal vs business trainer expenses
• reconcile POS → deposits → GST filings
• explain regulated vs non-regulated health services
• prepare CPA-certified audit binder
• negotiate penalty/interest relief

Learning insight: Fitness audits are won with package breakdowns + class logic + complete documentation.

Common CRA Findings in Fitness & Wellness Audits

• GST/HST not charged on memberships
• personal training misclassified as exempt
• supplements misclassified as zero-rated
• online classes taxed incorrectly
• corporate wellness misapplied
• ITCs denied (incomplete invoices, personal use)
• class packages including taxable/exempt services not separated
• unreported cash revenue
• equipment purchases lacking GST details

Learning insight: The biggest CRA adjustments come from incorrect classification and missing invoices.

Real-World Results

• A yoga studio avoided a $210,000 GST reassessment after Mackisen CPA rebuilt classification for all class types.
• A CrossFit gym reversed a $145,000 ITC denial by reconstructing equipment & renovation documentation.
• A personal training company eliminated penalties by proving proper taxable treatment of hybrid training programs.
• A spin studio cleared CRA findings after reconciling POS reports with deposits and GST filings.

Learning insight: When the fitness business presents a clean, CPA-organized file, CRA backs down.

SEO Optimization & Educational Value

Primary keywords: GST/HST fitness audit, CRA gym audit, taxable fitness services Canada, Mackisen CPA Montreal
Secondary keywords: personal training GST, yoga GST rules, wellness club GST audit, supplement GST/HST classification

Learning insight: Fitness-industry GST rules are one of the most searched topics — excellent for SEO authority.

Why Mackisen CPA Montreal

With 35+ years defending gyms, studios, trainers, and wellness businesses, Mackisen CPA Montreal is Québec’s top authority on GST/HST audits in the fitness industry.
We understand program structures, equipment ITCs, online class taxation, contractor rules, and CRA’s audit methodology.

Learning insight: Fitness audits require classification expertise + operational insight + documentation mastery — the Mackisen advantage.

Call to Action

If CRA is auditing your gym, studio, personal training business, or wellness club, contact Mackisen CPA Montreal immediately:

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

Learning Conclusion:

A CRA GST/HST Fitness & Wellness Audit tests service classification, membership taxability, ITC documentation, and revenue reconciliation.
Mackisen CPA Montreal ensures your fitness business is fully defended and protected from costly reassessments.