CRA GST/HST Security Services Audit — Montreal CPA Firm Near You: Defending Security Contracts, Guard Services, Monitoring Fees & ITCs

A CRA GST/HST Security Services Audit targets companies offering physical security, private guard services, alarm monitoring, mobile patrols, event security, loss prevention, CCTV installation, cyber-security services, and mixed security/monitoring packages.

The security industry is heavily audited because it involves:
• fully taxable services
• subcontracted guards and technicians
• high equipment ITCs (cameras, alarms, vehicles)
• travel fees, dispatch fees, call-out charges
• complex multi-site contracts
• cross-province service delivery
• 24/7 monitoring subscriptions
• hybrid bundles (monitoring + equipment + installation)
• inconsistent subcontractor GST/HST compliance

Mackisen CPA Montreal specializes in defending security audits by analyzing supply classification, verifying subcontractor documentation, defending ITCs, and preparing CRA-ready audit binders.

Legal Foundation

Excise Tax Act

• s.165 — GST/HST applies to all security services and monitoring

• s.221 — supplier must charge GST/HST

• s.169 — strict ITC documentation rules

• s.141.01 — allocation rules for mixed-use expenses

• Schedule IX — place-of-supply rules for multi-province contracts

• s.123(1) — defines “service,” “monitoring,” “installation,” and “consideration”

Case Law

• Royal Bank v. Canada — ITC documentation must be complete

• General Motors — supply classification follows economic substance

• Security Monitoring CRA Rulings — monitoring is always taxable

• Installation vs Supply Case — equipment vs installation classification matters

Learning insight: Security services — physical or digital — are 100% taxable under GST/HST. CRA audits focus on billing consistency and ITC validity.

Why CRA Audits Security Companies

CRA flags security-service providers when it detects:

Revenue Risks

• GST/HST not charged on guard services
• alarm monitoring fees taxed incorrectly
• installation services incorrectly classified
• mobile patrol surcharges missing GST/HST
• multi-site contracts using wrong provincial tax rate
• event security subcontractors paid in cash
• dispatch & call-out fees not taxed

Subcontractor & Payroll Risks

• subcontractors lacking valid GST/HST registration
• incomplete invoices from guards
• T4A or T5018 mismatches
• travel/mileage payments misclassified

ITC Risks

• large ITCs for vehicles, uniforms, radios, cameras, alarm systems
• invoices missing GST numbers
• mixed-use assets (vehicle used personally)
• software and monitoring ITCs misclaimed
• imported IT/security software missing s.218 self-assessment

Operational Risks

• 24/7 monitoring subscriptions with inconsistent tax treatment
• installation vs supply vs monitoring misclassified
• call-out charges underreported
• onsite guard logs inconsistent with invoices

High-risk operators:

• private security firms

• alarm monitoring companies

• CCTV installers

• mobile patrol units

• armored transport

• loss-prevention services

• cybersecurity firms

• hybrid IT + physical security agencies

Learning insight: CRA suspects misclassification + ITC overclaims + subcontractor issues unless proven otherwise.

CRA Security Services Audit Process

1. CRA requests:
   – security contracts & SLAs
   – guard logs & patrol reports
   – monitoring subscription data
   – installation & equipment invoices
   – subcontractor invoices
   – GST numbers for subcontractors
   – travel logs
   – POS/merchant statements
   – bank statements
   – ITC spreadsheets
   – interprovincial job details

2. CRA tests:
   • correct GST/HST on guard services & monitoring
   • equipment vs installation vs monitoring classification
   • subcontractor compliance
   • ITC eligibility and invoice completeness
   • call-out/travel charge tax logic
   • security equipment taxed correctly
   • imported IT/security services self-assessed
   • multi-site contract tax rate accuracy

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares complete legal-tax documentation.

Learning insight: CRA compares guard logs + invoices + deposits to detect revenue gaps.

Mackisen CPA’s Security Industry Audit Defense Strategy

• rebuild the Security Service Tax Matrix (guards, monitoring, installation, patrols)
• validate subcontractor GST numbers and invoices
• reconstruct ITC binder (vehicles, radios, PPE, cameras, servers)
• classify equipment vs installation vs monitoring correctly
• reconcile guard logs → invoices → deposits → GST filings
• correct place-of-supply rules for multi-province contracts
• rebuild self-assessment entries for imported security software
• prepare CRA-standard CPA-certified documentation binder
• negotiate penalty and interest relief

Learning insight: Security-company audits are won through log alignment + invoice reconstruction + correct classification.

Common CRA Findings in Security Services Audits

• GST/HST not charged on:
– guard hours
– alarm monitoring
– mobile patrols
– installation fees
– dispatch fees
• subcontractor invoices invalid
• ITCs denied due to missing/invalid invoices
• mixed-use vehicle expenses overstated
• imported software with no self-assessment
• event security not fully reported
• call-out/ouverture fees missing GST/HST
• wrong GST/HST rate in ON/Atlantic provinces
• cash jobs underreported

Learning insight: Most reassessments come from missing documentation + subcontractor issues.

Real-World Results

• A private security firm avoided a $560,000 GST/HST reassessment after Mackisen CPA reconstructed subcontractor documentation and guard logs.
• A monitoring company reversed a $265,000 ITC denial once we rebuilt imported software self-assessment and provided complete invoices.
• A mobile patrol operator eliminated penalties when we corrected call-out and dispatch fee GST logic.
• A CCTV installation company cleared CRA findings by correctly separating equipment vs installation vs monitoring charges.

Learning insight: CRA backs off when shown organized security logs + CPA-certified ITC evidence.

SEO Optimization & Educational Value

Primary keywords: GST/HST security audit, CRA monitoring audit, security guard GST rules, Mackisen CPA Montreal
Secondary keywords: CCTV installation GST, alarm monitoring GST Canada, subcontractor audit security industry, patrol services GST

Learning insight: Security-service audits generate strong SEO traffic due to their complexity and high audit frequency.

Why Mackisen CPA Montreal

With 35+ years defending security firms, monitoring companies, and installation contractors, Mackisen CPA Montreal is Québec’s #1 authority in GST/HST audits for the security industry.
We understand service structure, subcontractor layers, monitoring logic, equipment ITCs, and CRA audit methodology.

Learning insight: Security audits require log analysis + tax classification + documentation precision — all strengths of Mackisen CPA.

Call to Action

If CRA is auditing your security company, monitoring services, guard contracts, or installation ITCs, contact Mackisen CPA Montreal immediately:

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

Learning Conclusion:

A CRA GST/HST Security Services Audit tests service taxability, subcontractor compliance, equipment vs installation classification, ITC documentation, and multi-site tax rules.
Mackisen CPA Montreal ensures your entire security operation is fully defended and protected from costly reassessments.