. GST/QST CLEANUP CHECKLIST: FIXING YOUR SALES TAX RECORDS

Every Quebec business eventually reaches a point where its GST/QST records need a cleanup. Maybe receipts were misplaced, tax codes were wrong in the POS system, invoices were entered late, or input tax credits were miscalculated. Cleanup becomes essential when sales tax reports stop matching your accounting books, when refund claims are delayed, or when Revenu Québec begins asking questions. This GST/QST cleanup checklist provides a structured, step-by-step approach to fixing your sales tax records and restoring full compliance.

A systematic cleanup ensures accurate reporting, protects you from penalties, increases refund eligibility, and reduces audit risk.

LEGAL AND REGULATORY FRAMEWORK

The Excise Tax Act (GST) and the Quebec Taxation Act (QST) require businesses to keep accurate records that support every amount reported on their GST/QST returns. Revenu Québec may review or reassess records for up to four years from the date of assessment, longer in cases of misrepresentation or incomplete documentation.

Businesses must maintain sales invoices, receipts, contracts, ledgers, bank statements, and tax calculations for at least six years. A cleanup ensures these requirements are met and that your accounting records reflect correct tax treatment.

KEY COURT DECISIONS

Courts consistently rule that taxpayers are responsible for the accuracy of their GST/QST filings. In several cases, taxpayers attempted to blame software errors, missing documents, or bookkeeping delays — but judges upheld reassessments due to insufficient documentation.

Courts also approved indirect audit methods when records were incomplete, such as bank deposit analysis or markup tests. These decisions highlight the need for complete, organized, and accurate records — and why cleanup is essential before issues escalate.

WHY REVENU QUÉBEC TARGETS DIRTY OR INCOMPLETE RECORDS

Revenu Québec regularly flags businesses with:
• inconsistent sales tax totals
• missing invoices
• mismatched sales vs. deposits
• repeated late filings
• unusual input tax credit patterns
• incorrect rate application
• chronic bookkeeping delays

A cleanup eliminates these red flags and restores confidence in your GST/QST compliance.

GST/QST CLEANUP CHECKLIST: FIX YOUR SALES TAX RECORDS

Follow this checklist step-by-step to bring your records back to compliance.

1. Collect all missing sales invoices
   Gather invoices from:
   • POS system
   • online platforms (Shopify, Amazon, Square, Stripe)
   • manual invoices
   • email confirmations
   Ensure all taxable, zero-rated, and exempt sales are captured.

2. Re-enter or correct sales data in your accounting software
   Ensure each sale reflects:
   • accurate GST/QST amounts
   • proper tax codes
   • correct customer information
   • correct invoice dates and numbers

3. Reconcile bank deposits with sales
   Match all deposits to actual revenue. Identify deposits that are:
   • transfers
   • loans
   • refunds
   • shareholder contributions
   Only business sales should be included in GST/QST totals.

4. Gather missing supplier invoices
   Request duplicate invoices from vendors. Ensure each shows:
   • supplier GST/QST numbers
   • invoice date
   • valid descriptions
   • tax amounts
   You cannot claim ITCs/ITRs without complete invoices.

5. Correct bookkeeping entries for expenses
   Reclassify or adjust:
   • personal expenses
   • mixed-use expenses
   • incorrectly coded items
   • expenses recorded without tax
   • duplicate entries

6. Recalculate input tax credits and refunds
   Ensure ITCs/ITRs are:
   • eligible
   • supported by invoices
   • fully captured
   • not duplicated
   • allocated correctly (e.g., vehicle expenses)

7. Review credit notes, refunds, and adjustments
   Ensure all returns and discounts were recorded properly and that tax was adjusted accordingly.

8. Correct POS tax coding problems
   Update your system to ensure correct GST/QST rates. Incorrect tax codes cause systematic errors across months or years.

9. Review place-of-supply rules
   Correct mistakes on interprovincial and international sales:
   • GST/HST for other provinces
   • QST for Quebec supplies
   • zero-rating rules for exports

10. Fix capital asset accounting
    Capital purchases often have:
    • missing ITCs
    • incorrect posting
    • outdated tax treatment
    Correct calculations and recover eligible credits.

11. Reconcile GST/QST control accounts
    Match your general ledger with recalculated GST/QST collected and paid. Investigate any unexplained differences.

12. Prepare adjustments or amended returns
    If prior returns are incorrect, prepare:
    • GST/QST adjustments
    • amended FPZ-500-V returns
    • explanatory notes
    This prevents penalties and audit issues later.

13. Create an audit-ready cleanup file
    Include:
    • reconciliation schedules
    • corrected invoices
    • supporting documentation
    • adjustments filed
    • summarized findings
    This protects you during future Revenu Québec reviews.

14. Set up new internal controls
    After cleanup, implement systems that prevent the same problems from recurring.

MACKISEN STRATEGY

Mackisen CPA specializes in GST/QST cleanup for businesses in chaos or transition. We reconstruct missing records, correct bookkeeping errors, update POS systems, rebuild tax codes, and file amended returns. Our team identifies unclaimed ITCs, fixes incorrect sales tax filings, and establishes strong internal processes so your business stays compliant long-term.

For businesses facing audits or refund delays, Mackisen prepares complete cleanup documentation and communicates with Revenu Québec on your behalf.

REAL CLIENT EXPERIENCE

A Montreal retailer discovered years of incorrect POS tax coding. Mackisen recalculated all GST/QST, filed adjustments, and avoided a major reassessment.

A consultant lost thousands in ITCs due to missing receipts. Mackisen contacted suppliers, recovered duplicates, and restored eligible credits.

A construction business had mismatched sales and deposits for multiple years. Mackisen rebuilt revenue records and prepared corrected filings.

COMMON QUESTIONS

Can I clean up years of GST/QST records
Yes. A CPA can help reconstruct and correct multiple years of filings.

Will cleaning up trigger an audit
No — cleanup reduces audit risk by fixing red flags proactively.

Can I recover old ITCs
Yes, within statutory limits, if proper documentation exists.

What if I find large mistakes
You may need to file adjustments. A CPA will determine the cleanest approach.

Should cleanup be done annually
Monthly or quarterly review is ideal, but annual cleanup is essential.

WHY MACKISEN

With more than 35 years of combined CPA experience, Mackisen CPA Montreal rebuilds, cleans, and corrects GST/QST records for businesses across Quebec. Our structured cleanup process restores compliance, protects you from penalties, maximizes credits, and creates peace of mind.