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

A CRA Large-Case GST/HST Audit is the highest level of indirect-tax scrutiny applied to corporations with complex transactions, multi-jurisdictional operations, large refund claims, or industry-specific risk factors. These audits are conducted by CRA’s Large Business Audit Division and often involve multi-year reviews, multiple audit teams, and coordinated GST/HST–income-tax analysis.

Mackisen CPA Montreal specializes in defending large-case files by rebuilding transaction trails, mapping supply chains, documenting place-of-supply rules, and preparing audit-ready GST/HST evidence that satisfies CRA’s advanced compliance standards.

A large-case audit is not routine — it is a legal, financial, and operational test of your entire GST/HST reporting structure.

Legal Foundation

Law: Excise Tax Act ss. 286–289 — record-keeping, document production, and audit powers.
ETA s. 288 — CRA authority to inspect, audit, or examine premises and records.
ETA Sch. IX — place-of-supply rules determining correct GST/HST rates by province.
Jurisprudence: Northwest Co. Inc. v. Canada (2011 TCC) — incomplete invoices invalidate ITCs even when purchases are legitimate.

Learning insight: CRA large-case auditors do not test your arithmetic. They test whether your tax logic is legally defensible under the Excise Tax Act.

Why CRA Selects Your File for a Large-Case GST/HST Audit

The CRA Large Business Directorate selects files based on intensity, complexity, and national risk indicators. Triggers include:

• Multi-province operations with different GST/HST rates

• Large recurring refunds, especially in construction, manufacturing, transportation

• Complex supply chains, drop-shipping, warehousing, or intercompany flows

• High volumes of ITCs claimed through subcontractors

• Large intercompany recharges, cost-sharing agreements, or head-office allocations

• Foreign suppliers, digital services, or imported intangible transactions

• Unusual variances between sales reported to CRA and provincial filings

Learning insight: High-intensity audits are triggered by structural complexity, not suspicion. Complexity is neutral — disorganization is not.

How CRA Conducts a Large-Case GST/HST Audit

Large-case audits follow an expanded protocol:

1. Opening Audit Letter — CRA defines scope, periods, and required records.

2. Risk Interview — CRA questions supply chains, billing flows, contracts, and systems.

3. Document Examination — CRA reviews thousands of invoices, bank records, contracts, and GL entries.

4. Place-of-Supply Analysis — CRA validates whether tax was charged at the correct provincial rate.

5. ITC/ITR Verification — CRA examines commercial activity, supporting invoices, and payment proofs.

6. Supplier/Customer Contact — CRA may contact your counterparties directly for verification.

7. Transactional Testing — CRA samples large, unusual, or cross-border transactions.

8. Proposed Adjustments Letter — CRA prepares draft reassessments.

9. Final Assessment — CRA issues assessments unless representation overturns them.

Learning insight: Large-case audits are decided by documentation quality, audit narration, and the strength of your CPA’s legal-tax reasoning.

What Mackisen CPA Montreal Does During a Large-Case Audit

Our large-case defense strategy is structured like a litigation file:

• Reconstruct supply chains, billing flows, and supporting ledgers

• Map GST/HST place-of-supply rules for every province involved

• Validate all suppliers’ GST/HST/QST registration numbers

• Build a complete ITC/ITR eligibility binder with ETA s.169 compliance

• Prepare contract matrices showing taxable/exempt portions

• Reconcile intercompany loans, service agreements, and management fees

• Draft legal-tax memoranda for complex transactions (digital, cross-border, dropship)

• Respond to CRA queries with structured CPA briefs instead of raw documents

• Negotiate scope reduction where CRA overreaches

• Challenge incorrect adjustments before they become assessments

Learning insight: CRA is not persuaded by volume — it is persuaded by clarity, structure, and evidence. Mackisen CPA structures your evidence like a legal defense file.

Frequent CRA Red Flags in Large-Case GST/HST Audits

CRA focuses heavily on the following high-risk areas:

• ITCs claimed on invalid or incomplete invoices

• Supplies misclassified as exempt when they are taxable

• Incorrect GST/HST rate applied in multi-provincial transactions

• Missing proof of payment for ITC-claimed expenses

• Subcontractor fraud or unregistered suppliers

• Intercompany service-charge allocations without underlying documentation

• Digital or intangible supplies incorrectly assigned to the wrong province

• Imported services where self-assessment under ETA s.218.01 was missed

• Refund claims inconsistent with historical patterns

Learning insight: The biggest audit losses come from documentation errors — not legal errors. Fixing documentation is preventive tax risk reduction.

Advanced Learning Section — How to Bulletproof a GST/HST System

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Secondary Keywords: GST compliance review, CRA transactional audit, place-of-supply correction, ITC documentation, QST audit support.

To build a GST/HST system that survives a large-case audit:

• Implement invoice validation protocols before posting any supplier invoice

• Maintain electronic audit trails linking each ITC to payment proof

• Use contract annexes specifying tax treatment for complex services

• Document place-of-supply logic in internal SOPs

• Regularly verify subcontractor GST registration

• Train staff in digital, cross-border, and reverse-charge GST rules

• Maintain separate audit folders for foreign-supplier transactions

• Conduct annual GST/HST health checks (mini-audits) performed by Mackisen CPA

Learning insight: CRA auditors respect internal systems that demonstrate foresight, structure, and transparency. Those systems lead to clean assessments and fast closure.

Real-World Success — Mackisen CPA Montreal Large-Case Wins

• Manufacturing client: CRA attempted a $1.2M GST adjustment based on misapplied place-of-supply rules. Mackisen CPA overturned 100% using contract mapping and ETA Schedule IX analysis.

• National distributor: Refunds totaling $740,000 were frozen for 7 months. Mackisen CPA supplied ITC binders and received full release within 21 days.

• Technology firm: CRA challenged cross-border software licensing as exempt. Mackisen CPA defended taxable treatment under ETA s.123(1) and prevented a $280,000 reassessment.

Learning insight: Large-case audits are won through legal-tax argumentation and structured documentation — not negotiation.

Why Mackisen CPA Montreal

With over 35 years of combined tax-audit and GST/HST expertise, Mackisen CPA Montreal is equipped to defend complex, high-stakes corporate audits. We communicate directly with CRA’s Large Business Directorate, prepare structured audit files, and provide legal-tax narratives aligned with court-tested jurisprudence.

Your advantage is not just representation — it is strategy, structure, and mastery of audit-proof compliance.

Call to Action

If CRA has launched a Large-Case GST/HST Audit or frozen your refunds, time matters.
Book your audit-defense call today.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA large-case audit tests your documentation, your tax logic, and your systems. Mackisen CPA Montreal ensures all three are aligned, defensible, and audit-ready — turning a high-risk audit into a controlled, strategic process.