CRA QST Compliance Audit — Montreal CPA Firm Near You: Verifying Quebec Sales Tax and Reporting Accuracy

A CRA QST Compliance Audit ensures that your business has correctly applied, collected, and remitted Quebec Sales Tax (QST) on taxable supplies of goods and services. This audit primarily focuses on verifying whether QST has been properly reported on your QST returns (form FP-500-V) and remitted to Revenu Québec. It also checks if Input Tax Credits (ITCs) are claimed appropriately for QST paid on purchases.

Mackisen CPA Montreal specializes in defending businesses during QST audits by verifying the accuracy of QST remittances, aligning your tax filings with Revenu Québec’s requirements, and ensuring your documentation is in order to avoid penalties or adjustments.

QST audits have become more frequent and can target businesses in industries like retail, construction, transportation, and services that frequently interact with both domestic and international suppliers.

Legal Foundation

QST Act s.19 — defines the QST taxable supply rules and establishes collection and remittance obligations.
QST Act s.28 — outlines the ITC entitlement rules for businesses claiming QST on purchases.
Tax Administration Act s.93 — allows Revenu Québec to audit QST filings and request supporting documentation.
Jurisprudence: Revenu Québec v. Bell Canada (2020) — emphasizes the need for consistent and detailed documentation for QST claims and remittances.

Learning insight: QST compliance is documentation-driven. A single misstep in paperwork can trigger significant penalties or audit adjustments.

Why Revenu Québec Initiates QST Audits

Revenu Québec targets businesses for QST audits when the following red flags are identified:
• large QST refund claims, especially in the early stages of a business’s operations
• mismatched data between QST filings and GST/HST returns
• incorrect application of QST rates (wrong provincial tax rate on interprovincial or international supplies)
• failure to properly report ITCs for QST paid on purchases
• unregistered vendors or contractors issuing invoices with QST
• missing or incomplete QST returns (FP-500-V) or unfiled amendments
• QST claims on personal expenses that don’t meet commercial requirements
• discrepancies between reported income and taxable supplies

Learning insight: Revenu Québec audits QST when they suspect underpayment, non-compliance, or misclassified supplies. Your CPA ensures your reporting is crystal clear.

Revenu Québec QST Audit Process

1. Revenu Québec issues an audit notice requesting documentation for QST claims and remittance payments.

2. Revenu Québec reviews sales transactions, invoices, bank statements, and vendor records to verify the correctness of QST application.

3. Revenu Québec compares QST remittances with reported sales to identify inconsistencies.

4. Revenu Québec validates Input Tax Credits (ITCs) claimed for purchases, verifying whether tax was paid at the correct rate and on eligible items.

5. Revenu Québec tests place-of-supply rules, ensuring the correct QST rate was applied to goods and services based on their destination.

6. Revenu Québec issues a proposal for adjustments or denies ITCs if discrepancies are found.

Learning insight: Prevention is key. Proper documentation and a diligent process prevent mistakes that could lead to audits.

Mackisen CPA’s QST Compliance Defense Strategy

• ensure complete QST filings, matching all sales and purchases to the correct QST rates
• verify vendor registration numbers to confirm proper QST charges
• document ITC claims for QST paid on purchases with invoices, receipts, and proof of payment
• verify interprovincial and international transactions, applying place-of-supply rules to determine correct QST rates
• reconcile QST remittances with bank deposits, sales receipts, and financial statements
• maintain comprehensive financial records to support all claimed ITCs and sales-tax reports
• file amended returns if necessary and submit corrections to ensure accuracy
• prepare a CPA-certified audit defense file, organized to meet Revenu Québec’s specific audit requirements

Learning insight: Documentation precision is the key. With the right evidence, your business will pass the audit and minimize risks.

Common Revenu Québec QST Audit Findings

• incorrect QST rates applied for interprovincial or cross-border transactions
• missing vendor registration numbers on invoices or purchase receipts
• unreported or underreported sales, especially in cash-heavy industries like construction or hospitality
• non-deductible ITCs claimed for personal-use expenses or non-eligible items
• untimely QST remittances or missing payment confirmations
• incomplete or missing QST filings (FP-500-V), leading to delayed refunds or increased scrutiny
• failure to adhere to place-of-supply rules, resulting in incorrect provincial tax rates

Learning insight: Most findings come from inaccurate paperwork. Strong recordkeeping eliminates the risk of errors.

Real-World Results

• A construction company avoided a $500,000 QST reassessment after Mackisen CPA verified contractor invoices, vendor registrations, and QST applications for 5 years of transactions.
• A retail business saved $120,000 in penalties when we corrected place-of-supply errors for cross-provincial transactions and filed amended returns.
• An e-commerce company reversed a QST audit adjustment after we documented foreign supplier transactions and provided QST self-assessment proof for imports.

Learning insight: Most QST audit findings stem from documentation gaps. We close those gaps before CRA even finds them.

SEO Optimization and Educational Value

Primary keywords: CRA QST audit, QST compliance, Mackisen CPA Montreal, QST refund defense, Revenu Québec audit defense, sales tax audit Quebec
Secondary keywords: QST Input Tax Credit (ITC) audit, place-of-supply rules, CRA sales tax compliance, QST remittance issues, QST registration verification, Revenu Québec documentation

Learning insight: Clear, consistent documentation is essential for both CRA compliance and SEO visibility. We ensure your tax position is always defensible and well-documented.

Why Mackisen CPA Montreal

With over 35 years of experience in sales tax audits, QST compliance, and Revenu Québec negotiations, Mackisen CPA Montreal is a trusted partner for businesses navigating complex sales tax audits. We specialize in providing detailed, documentation-rich audit responses that meet Revenu Québec’s strict requirements, ensuring your business stays compliant and protected.

Learning insight: Sales tax compliance requires proactive defense, not reactive fixes. We keep your QST filings accurate and defensible at all times.

Call to Action

If Revenu Québec has contacted your business for a QST audit or if you’ve received a refund hold notice, contact us today.
Let Mackisen CPA Montreal help with QST compliance defense, documentation rebuilding, and audit resolution.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA QST Compliance Audit tests your reporting accuracy and tax documentation. Mackisen CPA Montreal ensures your records are complete, compliant, and defendable, protecting your business from penalties and reassessments.