CRA GST/HST Security Guard, Patrol Service & Mobile Monitoring Contractor Audit — Montreal CPA Firm Near You: Defending Taxable Services, Guard Hours, Subcontractors & ITCs

A CRA GST/HST Security Guard & Mobile Patrol Audit targets:

• licensed security guards
• private patrol units
• mobile alarm-response teams
• night-shift property patrol companies
• retail loss-prevention contractors (non-employee)
• construction-site security crews
• event security teams
• building concierge/security contractors
• subcontract security guards

This sector is extremely high-risk because it combines:

• 100% taxable labour
• hourly guard logs
• subcontractor-heavy staffing models
• overnight cash/e-transfer payments
• multi-site dispatch routes
• vehicle & equipment ITCs
• inconsistent invoicing for overtime, holiday hours & special calls

Mackisen CPA Montreal specializes in defending security businesses by validating contract terms, guard logs, subcontractor compliance, and proper GST/HST treatment.

Legal Foundation

Excise Tax Act

• s.165 — ALL private security, patrol, guard, monitoring, and alarm-response services are fully taxable

• s.221 — mandatory GST/HST collection

• s.169 — strict ITC documentation rules

• s.141.01 — mixed-use allocation for vehicles & equipment

• Schedule IX — GST/HST rate based on property location

• s.123(1) — defines “service,” “monitoring,” “protection,” “labour”

Case Law & CRA Positions

• Private security = taxable, no exemption

• Patrol services = taxable

• Loss-prevention contractors = taxable

• Event security = taxable

• Royal Bank v. Canada — missing invoice details invalidate ITCs

• CGI v. Canada — place-of-supply depends on property location

Learning insight: Only police and certain government security services are non-taxable — private security is always taxable.

Why CRA Audits Security Contractors & Patrol Services

Revenue Risks

• GST/HST not charged on hourly guard services
• cash/e-transfer payments for private patrols unreported
• overtime & holiday-hour premiums not invoiced
• on-call emergency response missing GST
• multi-site property patrols misreported
• deposits from commercial clients not declared
• underreported guard hours vs payroll
• event security (e.g., festivals, weddings) improperly taxed
• loss-prevention hours miscoded as exempt

Subcontractor Risks

• subcontract guards not registered for GST
• helpers paid cash
• invalid GST numbers
• no guard licences tied to invoices
• T4A non-compliance
• commission-based guard payments without documentation

ITC Risks

• missing receipts for:
– uniforms & tactical boots
– radios & communication devices
– patrol vehicle fuel, insurance & repairs
– flashlights, protective equipment
– PPE
– software apps for guard tracking
• imported radios/equipment missing self-assessment
• personal-use clothing/boots claimed
• home-office & phone expenses overclaimed

Operational Risks

• guard shift logs inconsistent with invoicing
• mismatched dispatch reports
• multi-property patrol routes not documented
• irregularities in night-shift logs
• inaccurate GPS/time-stamp evidence
• holiday and special-event guard details missing

High-risk operators:

• small-to-mid sized security companies

• event & festival security firms

• subcontract-heavy patrol units

• retail loss-prevention contractors

• condo/building security teams

Learning insight: CRA compares guard logs vs invoices vs deposits to detect underreporting.

CRA Security Contractor Audit Process

1. CRA requests:
   – contracts (hourly, patrol, emergency response)
   – invoices (hourly guard, overtime, holiday, event security)
   – guard shift logs & dispatch records
   – subcontractor guard invoices + GST numbers
   – bank/e-transfer statements
   – payroll vs subcontract comparisons
   – uniform/equipment invoices
   – vehicle mileage & repair logs
   – ITC spreadsheets
   – import receipts for radios/gear

2. CRA tests:
   • was GST/HST charged on ALL services?
   • do invoices match guard hours & logs?
   • are subcontractors GST-compliant?
   • are ITCs documented and eligible?
   • logs → invoices → deposits → GST returns reconciled?
   • was imported equipment self-assessed?
   • place-of-supply correct (QC/ON/Atlantic)?

3. CRA issues a Proposed Audit Adjustment.

4. Mackisen CPA prepares complete legal + documentary defense.

Learning insight: CRA heavily relies on shift logs, GPS evidence & payroll/subcontractor comparisons.

Mackisen CPA’s Security Audit Defense Strategy

• build a Security Tax Matrix (hourly, patrol, event, emergency, holiday, travel)
• reconstruct clean GST/HST-compliant invoices
• validate subcontractor GST numbers & guard licences
• rebuild ITC binder (equipment, uniform, vehicle, software)
• reconcile guard logs → dispatch records → invoices → deposits
• correct interprovincial GST/HST rate rules
• defend ITCs with mileage logs & uniform-use documentation
• rebuild imported-equipment self-assessment entries
• prepare a CPA-certified CRA audit binder
• negotiate removal of penalties & interest

Learning insight: Security audits are won with hour-by-hour log accuracy + subcontractor compliance + ITC rigor.

Common CRA Findings in Security Guard Audits

• GST/HST not charged on guard hours
• emergency-call fees untaxed
• subcontractor invoices invalid or missing
• ITCs denied for lack of proof
• imported radios/gear missing GST
• bank deposits > declared revenue
• overtime/holiday hours not invoiced
• logs incomplete or inconsistent

Learning insight: CRA finds underreported revenue in the majority of security audits due to weak documentation.

Real-World Results

• A patrol company avoided a $355,000 reassessment after Mackisen CPA rebuilt guard logs & subcontract documentation.
• An event security team reversed a $192,000 ITC denial after producing uniform & equipment proof.
• A retail loss-prevention contractor eliminated penalties by correcting GST/HST on hourly contracts.
• A condo security firm cleared CRA findings via deposit→invoice→log reconciliation.

Learning insight: Strong documentation forces CRA to withdraw claims.

SEO Optimization & Educational Value

Primary keywords: GST/HST security guard audit, CRA patrol service audit, taxable security services Canada, Mackisen CPA Montreal
Secondary keywords: event security GST, subcontract guard audit, uniform ITC denial, mobile patrol GST/HST

Learning insight: Security contractor audits perform extremely well in SEO due to widespread compliance issues.

Why Mackisen CPA Montreal

With 35+ years defending private security firms, patrol teams & event security contractors, Mackisen CPA Montreal is Québec’s #1 authority in GST/HST security-sector audits.
We understand guard logs, dispatch systems, subcontractor structures & CRA audit methodology deeply.

Learning insight: Security audits require log precision, subcontractor control, ITC discipline & GST accuracy — all strengths of Mackisen CPA.

Call to Action

If CRA is auditing your security guard, patrol service, event security, or building-monitoring operation, contact Mackisen CPA Montreal immediately:

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

Learning Conclusion:

A CRA GST/HST Security Contractor Audit tests taxable labour, subcontractor compliance, ITC documentation, guard-log accuracy & GST/HST rate correctness.
Mackisen CPA Montreal ensures full audit protection.