Preparing your year-end GST/QST obligations is a critical step for any Quebec business. Whether you operate a retail store, consulting practice, e-commerce business, construction company, or service-based enterprise, year-end sales tax reconciliation ensures your GST/QST records are accurate, complete, and aligned with your financial statements. Many businesses encounter discrepancies at year-end because they rely solely on quarterly filings or POS totals rather than reconciling systematically. This detailed year-end GST/QST checklist helps businesses avoid mistakes, clean up records, and prepare audit-ready files before closing the fiscal year.

Year-end is the perfect time to identify misclassifications, missing documents, incorrect credits, or inconsistencies between the bookkeeping system and your GST/QST returns. Completing this checklist ensures smoother tax filing, accurate remittances, and reduced risk of audits.

LEGAL AND REGULATORY FRAMEWORK

Year-end GST/QST obligations fall under the Excise Tax Act and the Quebec Taxation Act. Businesses must ensure that all taxable sales, exempt sales, and zero-rated sales are properly recorded and documented. Revenu Québec requires businesses to maintain full supporting documents — invoices, receipts, contracts, bank statements, credit notes, and internal summaries — for at least six years. Year-end reconciliations must align with the sales tax returns filed during the year.

Year-end review must also confirm that GST/QST returns match the general ledger, POS reports, accounts receivable, accounts payable, and year-end financial statements. Any discrepancies should be corrected before preparing the final GST/QST remittance or year-end adjustments.

KEY COURT DECISIONS

Courts in Quebec and across Canada emphasize the importance of year-end accuracy. In several decisions, businesses were reassessed because year-end reconciliations did not match the GST/QST returns filed throughout the year. Judges confirmed that taxpayers must maintain organized sales tax records and ensure consistency between financial statements and GST/QST filings.

In other cases, businesses attempted to claim input tax credits without proper documentation. Courts upheld Revenu Québec’s denial of credits, noting that the taxpayer must provide proof even if the expense occurred earlier in the year. These rulings highlight the importance of year-end cleanup and maintaining complete records.

WHY CRA AND REVENU QUÉBEC TARGET YEAR-END DISCREPANCIES

Revenu Québec frequently identifies issues during year-end because this is where inconsistencies become most visible. Common red flags include:
• year-end adjusting entries that change tax totals
• mismatched GST/QST vs. income tax revenues
• large unclaimed or overstated input tax credits
• inconsistent tax coding in POS systems
• missing or late credit notes
• businesses with unstable reporting patterns

These discrepancies often trigger audits, refund verifications, or follow-up questionnaires. Completing a robust year-end checklist greatly reduces these risks.

THE ULTIMATE YEAR-END GST/QST CHECKLIST

1. Reconcile total annual sales
   Match your annual sales from POS, bank deposits, bookkeeping, and financial statements.

2. Verify taxable, exempt, and zero-rated classifications
   Correct any misclassifications before finalizing year-end totals.

3. Reconcile GST/QST collected throughout the year
   Ensure the amounts match both your general ledger and the returns filed.

4. Match input tax credits with complete documentation
   Confirm every ITC/ITR has a valid invoice showing supplier tax numbers and tax amounts.

5. Identify missing or late invoices
   Request duplicates from suppliers and attach documentation for year-end.

6. Confirm year-end adjustments
   Review write-offs, bad debt adjustments, and credit notes to ensure proper tax treatment.

7. Review recurring payments and subscriptions
   Ensure recurring expenses were coded correctly for GST/QST eligibility.

8. Verify capital asset purchases
   Ensure capital ITCs are claimed correctly and supported by invoices.

9. Reconcile GST/QST control accounts
   Match all tax collected and all tax paid to ledger balances.

10. Check compliance with filing frequency
    Confirm you met all monthly, quarterly, or annual filing obligations.

11. Analyze refund trends
    Large refunds may signal misclassified expenses or missing taxable sales.

12. Prepare an audit-ready year-end folder
    Include sales summaries, expense documentation, reconciliations, and all GST/QST returns filed.

Completing these steps ensures accuracy, minimizes audit risk, and allows you to enter the next fiscal year with clean records.

MACKISEN STRATEGY

Mackisen CPA helps businesses complete their year-end GST/QST preparation through detailed reconciliations and structured compliance reviews. We examine your sales tax accounts, recalculate tax totals, verify documentation, and prepare year-end adjusting entries. Our team ensures that all GST/QST returns match your year-end financial statements and that discrepancies are resolved before your file is finalized.

We also create customized year-end checklists, digital filing systems, and internal controls to simplify future periods. For businesses that have not reconciled GST/QST regularly throughout the year, Mackisen performs complete year-end cleanup and prepares follow-up correspondence to Revenu Québec if required.

REAL CLIENT EXPERIENCE

A Montreal retail chain discovered a large discrepancy between year-end GST/QST totals and individual monthly filings. Mackisen investigated, found misconfigured POS tax codes, corrected filings, and prevented a reassessment.

A construction firm had accumulated unclaimed input tax credits throughout the year due to missing invoices. Mackisen contacted suppliers, gathered documentation, and recovered the ITCs before closing the year.

A service-based startup misclassified exempt services and taxable services throughout the year. Year-end reconciliation revealed a major under-collection of tax. Mackisen corrected the coding, prepared adjusting entries, and avoided a full audit.

COMMON QUESTIONS

What if I find errors during year-end reconciliation?
You can file adjustments or corrections with Revenu Québec before issues escalate into an audit.

Do I need to reconcile GST/QST even if I file quarterly?
Yes. Year-end reconciliation ensures long-term accuracy and financial statement consistency.

How organized should my year-end folder be?
It should include invoices, summaries, reconciliations, returns, adjustments, and supporting documents in case of audit.

Is year-end review required by law?
It is not required, but it is essential for compliance, accuracy, and audit protection.

Can year-end cleanup recover missed tax credits?
Yes. Many businesses discover unclaimed ITCs during year-end review.

WHY MACKISEN

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses prepare accurate, compliant, and audit-ready GST/QST year-end reconciliations. Our expertise ensures that all tax filings align with your financial records, protecting your company from reassessment and penalties.