CRA Large-Case GST/HST Audit — Montreal CPA Firm Near You: Complex Transactions

A CRA Large-Case GST/HST Audit targets medium and large corporations with multi-jurisdictional, high-value, or cross-border operations. These audits are detailed reviews conducted by CRA’s Large Business Directorate to ensure that Input Tax Credits (ITCs) and GST/HST reporting reflect the company’s true commercial activity across Canada.
Mackisen CPA Montreal represents corporations in these large-case audits, coordinating documentation, intercompany reconciliation, and cross-border compliance while protecting refunds and reducing exposure to penalties.

Legal Foundation

Law: Excise Tax Act s. 165 (tax on supplies), s. 169 (ITC entitlement), s. 286 (books and records), s. 288 (audit powers).
Jurisprudence: Northwest Company Inc. v. Canada (2011 TCC) — CRA may deny ITCs when invoices lack sufficient detail or supplier information, even when tax was paid.

Learning insight: Large-case audits aren’t about distrust—they’re about detail. CRA expects multinationals to document every step of their supply-chain tax flow.

Why CRA Conducts Large-Case GST/HST Audits

Large corporations are audited because their operations span multiple provinces, subsidiaries, and tax regimes. CRA focuses on areas with the highest risk of misapplied GST/HST rates or unsupported ITCs. Common triggers include:

• Frequent interprovincial or cross-border transactions.

• Recurring refund claims above $100,000.

• Unusual ITC patterns relative to sector averages.

• Complex supply-chain or drop-shipment structures.

• Related-party charges lacking proper invoicing.

Learning insight: CRA’s algorithm doesn’t flag size—it flags complexity. Mackisen CPA simplifies complexity into compliance.

CRA’s Large-Case Audit Process

1. Engagement Letter: CRA notifies the corporation and assigns a Senior Auditor Team.

2. Scope Review: The audit may cover several years of GST/HST returns and intercompany files.

3. Information Requests: CRA issues RC59 demands for general ledger extracts, contracts, and proof of tax charged or paid.

4. On-Site Fieldwork: Auditors visit head offices or warehouses to test invoices, import entries, and point-of-sale data.

5. Final Proposal Letter: CRA outlines adjustments, penalties, and reassessment options.

Learning insight: At this level, CRA evaluates systems, not single invoices. Your compliance infrastructure is the evidence.

What Mackisen CPA Montreal Provides

1. Full Pre-Audit Diagnostic: We perform a parallel GST/HST review before CRA does, identifying exposure points.

2. Transaction Mapping: Each sale and purchase stream is reconciled to tax treatment and proper place-of-supply.

3. Cross-Border Proof: Exported goods and services documented under ETA Schedule VI (Zero-Rated Supplies).

4. Intercompany Reconciliation: Invoices and ITCs balanced between related entities.

5. Audit Representation: Our bilingual CPAs handle CRA meetings, queries, and closing agreements.

Learning insight: Audit success isn’t won during fieldwork—it’s prepared months before it begins. Mackisen CPA builds that readiness.

Frequent CRA Findings in Large-Case Audits

• Missing proof of tax paid on imports or drop shipments.

• Incorrect place-of-supply between provinces (5 %, 13 %, 15 %).

• ITCs claimed for partially exempt financial divisions.

• Cross-border management-fee errors causing double taxation.

• Late or missing self-assessment on intangible supplies.

Learning insight: Every $1 error in GST/HST can ripple into $10 of penalties if repeated across multiple divisions.

The Cost of Non-Compliance

• Interest and penalties at 4 % per quarter.

• Suspension of refunds until records are validated.

• Ineligible ITCs reversed retroactively for up to four years.

• Reputational impact on supplier relationships and CRA risk rating.

Learning insight: CRA keeps a compliance score for every large business. A strong audit defense improves that score for future years.

SEO Optimization and Learning Value

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Secondary Keywords: Interprovincial place-of-supply, CRA refund verification, corporate tax compliance Montreal, cross-border GST audit Canada, Mackisen CPA audit representation.

Learning insight: The key to SEO—and to CRA compliance—is consistency in documentation and messaging.

Real-World Corporate Success

• A logistics group recovered $1.2 million in GST/HST refunds after Mackisen CPA proved exports qualified as zero-rated under Schedule VI.

• A Québec manufacturer reduced penalties by 85 % when our team demonstrated ITC eligibility using electronic invoicing records.

• A construction firm had its audit closed without adjustments after we reconciled all place-of-supply transactions across five provinces.

Learning insight: Large-case audits reward those who prepare as meticulously as they operate.

Why Mackisen CPA Montreal

Mackisen CPA Montreal combines 35 years of corporate audit and tax-law expertise to protect enterprises from CRA and Revenu Québec exposure. Our large-business division specializes in cross-border and multi-entity GST/HST compliance. We transform audit pressure into proof of professional governance.

Learning insight: The difference between audit risk and audit readiness is documentation. Mackisen CPA makes that difference visible to CRA.