CRA GST/HST Tattoo Artist, Piercing Studio & Body Art Service Audit — Montreal CPA Firm Near You: Defending Taxable Services, Deposit Tracking, Subcontractors & ITCs

A CRA GST/HST Tattoo & Piercing Studio Audit targets:

• tattoo artists (solo or studio-based)
• piercing studios
• cosmetic tattoo artists (microblading, PMU)
• guest tattoo artists (traveling artists)
• tattoo apprentices on subcontract
• hybrid tattoo + body-art studios
• mobile tattoo artists at events
• tattoo conventions/expo operators

The tattoo/piercing industry is high-risk for CRA audits because it involves:

• 100% taxable artistic services
• cash/e-transfer-heavy payments
• deposits and multi-session projects
• traveling artists with cross-province GST issues
• subcontract arrangements (artist splits)
• high ITCs for equipment, inks, needles & PPE

Mackisen CPA Montreal specializes in defending tattoo studios by reconstructing appointment logs, validating subcontractors, correcting GST/HST billing, and building CRA-compliant ITC documentation.

Legal Foundation

Excise Tax Act

• s.165 — ALL tattooing, piercing & body-art labour is fully taxable

• s.221 — GST/HST must be charged on every service

• s.169 — ITCs require full supporting documentation

• s.141.01 — allocation for tools, equipment & mixed-use items

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

• s.123(1) — “service,” “artistic service,” “tangible personal property”

CRA & Case Law

• Tattoo/piercing = taxable service

• Microblading/PMU = taxable

• Aftercare product sales = taxable

• Guest artist services = taxable unless non-resident rules apply

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

• CGI v. Canada — place-of-supply GST rules must be followed

Learning insight: NO tattoo or piercing service is exempt — they are 100% taxable artistic services.

Why CRA Audits Tattoo & Piercing Studios

Revenue Risks

• GST/HST not charged on tattoo sessions
• cash-drop revenue underreported
• e-transfer payments with no invoices
• deposits not remitted in GST periods
• multi-session tattoo projects not invoiced in full
• piercing fees missing GST
• touch-up sessions billed incorrectly
• event tattoos (conventions) underreported
• guest artists not charging GST

Subcontractor Risks

• tattoo artists working on “chair split” without GST registration
• apprentices paid cash
• subcontract artists with invalid GST numbers
• artists misclassified for T4A purposes
• no written agreements for revenue splits

ITC Risks

• missing invoices for:
– needles, cartridges, grips
– inks & pigments
– gloves, masks, PPE
– chairs, lighting, power supplies
– cleaning products
– iPads, cameras for portfolios
– travel & show expenses
• imported inks/equipment missing self-assessment
• personal-use supplies claimed as business
• home-based artists overclaiming home-office ITCs

Operational Risks

• missing appointment logs
• inconsistent deposit tracking
• aftercare product sales not recorded
• convention revenue not matched to deposits
• cross-province tattooing misrated
• artist-split revenue not documented

High-risk operators:

• busy tattoo studios (3–10 artists)

• artists doing partial cash jobs

• microblading/PMU technicians

• traveling tattoo artists

• piercing-only shops

Learning insight: CRA focuses on deposits, cash flow, equipment ITCs & subcontract compliance.

CRA Tattoo/Piercing Audit Process

1. CRA requests:
   – invoices (sessions, touch-ups, piercing fees, aftercare sales)
   – appointment logs & booking platforms
   – subcontractor artist invoices + GST numbers
   – bank & e-transfer statements
   – equipment & ink purchase receipts
   – ITC spreadsheets
   – convention/event revenue
   – import records for inks & machines
   – revenue-split agreements

2. CRA tests:
   • GST/HST charged correctly on all services
   • deposits → invoices → GST filings alignment
   • subcontractor GST compliance
   • ITC documentation completeness
   • imported inks → self-assessment
   • cross-province GST/HST rate logic
   • cash/e-transfer reconciliation

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares a full legal + documentary defense.

Learning insight: CRA reconstructs studio activity using booking logs, supply purchases, deposits & artist-split records.

Mackisen CPA’s Tattoo & Piercing Audit Defense Strategy

• build a Tattoo Service Tax Matrix (session, deposit, touch-up, piercing, aftercare, travel)
• rebuild GST/HST-compliant invoices
• validate subcontractor artist GST registrations
• reconstruct ITC binder (inks, needles, PPE, equipment)
• reconcile booking logs → invoices → deposits → GST returns
• correct GST/HST for traveling guest artists
• rebuild imported-equipment self-assessment
• prepare CPA-certified CRA audit binder
• negotiate elimination of penalties & interest

Learning insight: Tattoo audits are won through perfect logs, subcontractor control & ITC accuracy.

Common CRA Findings in Tattoo & Piercing Audits

• GST/HST not charged on tattoo sessions
• deposits not included in GST filings
• subcontractor artists unregistered for GST
• ITCs denied due to missing receipts
• imported inks/tools missing GST
• bank deposits > reported revenue
• aftercare product sales not billed
• touch-up or add-on fees untaxed

Learning insight: The biggest reassessments come from deposit underreporting + ITC gaps + subcontractor failures.

Real-World Results

• A 6-artist studio avoided a $289,000 reassessment after Mackisen CPA rebuilt artist logs & equipment receipts.
• A microblading artist reversed a $141,000 ITC denial through full imported-pigment documentation.
• A piercing salon eliminated penalties after correcting GST/HST on jewelry & service fees.
• A traveling tattoo artist cleared CRA findings via deposit→invoice→log reconciliation.

Learning insight: CRA backs down when shown CPA-organized, meticulously documented evidence.

SEO Optimization & Educational Value

Primary keywords: GST/HST tattoo audit, CRA piercing studio audit, tattoo GST rules Canada, Mackisen CPA Montreal
Secondary keywords: tattoo ITC denial, artist subcontract audit, imported ink GST, microblading GST/HST

Learning insight: Tattoo-industry audits have strong SEO demand because of cash-heavy operations and regulatory confusion.

Why Mackisen CPA Montreal

With 35+ years defending tattoo artists, piercers, PMU technicians & multi-artist studios, Mackisen CPA Montreal is Québec’s top authority in GST/HST body-art audits.
We understand artistic workflows, split-revenue systems, equipment purchasing & CRA audit methodology deeply.

Learning insight: Tattoo audits require documented deposits, subcontractor compliance, ITC rigor & GST accuracy — all strengths of Mackisen CPA.

Call to Action

If CRA is auditing your tattoo studio, piercing shop, microblading practice or traveling artist operation, contact Mackisen CPA Montreal immediately:

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

Learning Conclusion:

A CRA GST/HST Tattoo & Piercing Audit tests taxable artistic labour, deposit reporting, subcontractor GST compliance, ITC documentation & imported-equipment rules.
Mackisen CPA Montreal ensures full audit protection.