GST/HST audit and examination

The CRA has shifted from a generalized to a specialized GST/HST compliance approach.

This approach will allow our auditors and managers to further enhance their technical expertise and be more equipped to apply the law on a timely basis. The enhancements will also provide the CRA with the information it needs to identify and effectively address instances of non-compliance.

Discontinuation of combined audits

In the past, most audits of smaller businesses (generally businesses with annual sales less than $4 million) have been done as combined audits - one audit covering both income tax and GST/HST. Combined audits have now been discontinued. Therefore, businesses will either be subject to an income tax or GST/HST audit.

Most audits are selected based on an assessment of risk of non-compliance. Non-compliance in one tax does not necessarily correlate with non-compliance in the other tax. In these cases, businesses may be subject to only a brief compliance review of the other tax rather than a full audit of both taxes.

Pre-assessment reviews

All GST/HST refund requests are systematically reviewed to identify errors or evidence of non-compliance. As a result, some are considered further before payment is approved. Given that we have a national workload model, claimants may be contacted by an examiner located anywhere in Canada. This helps us ensure refund integrity that is efficient and nationally consistent.

Post-assessment audits

The selection of GST/HST returns for audit or examination is based on both risk assessment and on random file selection. As indicated earlier, these audits focus on GST/HST filing errors and omissions.