CRA GST/HST Place-of-Supply Audit — Montreal CPA Firm Near You: Defending Multi-Province and Cross-Border Tax Rules

A CRA GST/HST Place-of-Supply Audit examines whether your business applied the correct provincial tax rate on sales of goods and services across Canada. Because GST/HST rates vary by province — 5%, 13%, 15% — CRA audits businesses to ensure each transaction was taxed based on where the supply was made, not where the business is located.

Mackisen CPA Montreal specializes in defending place-of-supply audits by mapping your sales flows, reviewing contracts, analyzing shipping documents, and ensuring your invoicing complies with the Excise Tax Act’s complex rules.

These audits are especially common for businesses operating in multiple provinces, selling digital services, running e-commerce, handling drop shipments, or shipping goods across borders.

Legal Foundation

Excise Tax Act Schedule IX — defines place-of-supply rules for goods and services.
CRA Policy Statements (P-051R2, B-103, B-079) — interpret multi-jurisdictional supplies.
Excise Tax Act s.165 — governs GST/HST rates applied to transactions.
Case law: City of Calgary v. Canada — confirms place-of-supply determinations must reflect commercial reality and taxable jurisdiction.

Learning insight: Place-of-supply is a legal test, not a guess. CRA audits businesses that get it wrong.

Why CRA Performs Place-of-Supply Audits

CRA launches these audits when it detects:
• incorrect tax rates applied to out-of-province customers
• mismatches between shipping addresses and GST/HST charged
• e-commerce or digital-service transactions taxed incorrectly
• cross-border sales improperly treated as zero-rated
• unclear documentation for where services were “performed” or “consumed”
• inconsistencies between GST/HST filings and income tax revenue
• recurring refunds tied to misclassified transactions
• intercompany charges lacking jurisdictional support

Learning insight: Even one wrong GST/HST rate can trigger a full audit of your entire sales cycle.

CRA Place-of-Supply Audit Process

1. CRA requests sales invoices, contracts, POS records, shipping logs, and customer addresses.

2. CRA rebuilds your tax logic: province of customer, consumption location, delivery location, performance of service.

3. CRA tests goods vs services vs digital supplies — each category has different place-of-supply criteria.

4. CRA checks for zero-rated export compliance.

5. CRA issues proposed adjustments if provincial rates were incorrect.

6. Your CPA responds with full documentation, rate logic, and legal justification.

Learning insight: CRA must see that your rate decisions were deliberate, documented, and compliant.

Mackisen CPA’s Audit Defense Strategy

• map every transaction to the correct province using Schedule IX rules
• verify customer location vs delivery vs billing to determine proper rate
• create a place-of-supply matrix proving consistency across all sales
• reconstruct missing shipping documents, customs entries, or service logs
• defend zero-rating for exports with bills of lading and export proofs
• correct past filings and negotiate relief
• build a complete CPA-certified audit binder aligned with CRA’s internal format

Learning insight: CRA trusts a place-of-supply file that is structured exactly like their own.

Common CRA Findings

• GST charged instead of HST — or vice versa
• HST at wrong rate (13% vs 15%)
• GST applied to digital services consumed outside Québec/Ontario
• missing proof of export for zero-rated supplies
• misclassification of services performed in different provinces
• drop shipments taxed incorrectly
• invoices missing delivery locations
• system defaults (e.g., QuickBooks, Shopify) overriding correct tax logic

Learning insight: Most place-of-supply errors come from software defaults — not accounting mistakes.

Real-World Results

• A Québec–Ontario distributor avoided a $680,000 reassessment after Mackisen CPA rebuilt its place-of-supply matrices and proved its contracts used correct rate logic.
• A logistics company reversed a $340,000 adjustment when we documented all U.S. exports and corrected missing shipping proofs.
• A digital-services provider cleared an audit by showing customers’ IP-location and billing-address logs matched zero-rating requirements.

Learning insight: CRA accepts clear, consistent tax-logic files. We build those files.

SEO Optimization and Educational Value

Primary keywords: CRA place-of-supply audit, GST/HST provincial rate errors, Mackisen CPA Montreal, CPA firm near you, GST HST audit defense
Secondary keywords: multi-province tax audit, digital services GST audit, drop shipment tax rules, GST/HST refund issues, CRA export zero-rating

Learning insight: The same clarity that wins audits also drives SEO — authoritative content builds both trust and visibility.

Why Mackisen CPA Montreal

With more than 35 years of sales-tax defense experience, Mackisen CPA Montreal is a leader in GST/HST place-of-supply audits. We understand the rules for goods, services, digital products, drop shipments, exports, and interprovincial transactions. Our bilingual CPAs prepare CRA-ready documentation that eliminates guesswork and minimizes reassessments.

Learning insight: Place-of-supply errors are preventable — with proper CPA oversight, they never become penalties.

Call to Action

If CRA has questioned your GST/HST rates or requested documentation for multi-province transactions, act immediately.
Contact Mackisen CPA Montreal for place-of-supply audit defense and a fully documented compliance file.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA GST/HST Place-of-Supply Audit tests your tax-logic, documentation, and jurisdictional compliance. Mackisen CPA Montreal ensures your rates are correct, your filings are defensible, and your business is protected.