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A sales tax compliance audit is a check of your own GST/HST records before the CRA asks for them: is every invoice taxed at the right rate, is every dollar you collected reported, and can you prove it. Do it yearly, and you’ll find most mistakes while they’re still cheap. A rate wrong by 8 points on $10,000 of sales is $800 of tax, before any interest.
What does a CRA examination look at?
Knowing the real thing helps you design the practice run. The CRA describes a GST/HST trust accounts examination as a review of your books to confirm that you worked out the tax you collected, the input tax credits you claimed and the net tax correctly. An examination officer phones or writes to set an appointment and says which records to bring.
The CRA lists several reasons a business can be picked, among them non-compliance and referrals from other parts of the agency. We haven’t found a published list of triggers beyond that, so ignore any website that promises one.
How do you run the audit yourself?
Start with the returns. Pick one filing period and make sure every return for it is filed, signed and matches your books. Then work backward from the return to the paper.
Pull a sample of invoices, say twenty, and spread them across provinces and across months. For each one, check three things: the customer’s province, the rate charged and the tax line. The GST/HST calculator gives the expected tax for any province in seconds. If an invoice is tax-included, the reverse HST calculator splits it back into price and tax, so $1,130 in Ontario becomes $1,000 plus $130.
Next, the input tax credits. Every credit you claimed needs an invoice with the supplier’s details behind it. No invoice, no claim, and that’s the sort of gap an officer finds first.
What do common mistakes cost?
Here’s what a single wrong rate does on $10,000 of sales to Ontario buyers, using the rates in our data file.
| What was charged | Tax collected | Tax owed at 13% HST | Shortfall |
|---|---|---|---|
| 5% GST only | $500.00 | $1,300.00 | $800.00 |
| 14% (Nova Scotia rate) | $1,400.00 | $1,300.00 | $100.00 over |
| 15% (old Nova Scotia rate) | $1,500.00 | $1,300.00 | $200.00 over |
Charging too much is a problem of its own. We haven’t confirmed how the CRA treats an over-charge, so ask it before you fix an old batch yourself.
The Nova Scotia row is there for a reason. The province’s HST fell from 15% to 14% on 1 April 2025, and old rate tables linger in billing software. Quebec has its own trap: the QST is worked out on the price before GST, so $1,000 carries $50.00 GST and $99.75 QST. Check the GST and QST calculator against your invoices if you sell there.
Which records should be ready?
Keep sales and purchase invoices, receipts, bank statements and whatever else backs each return, and keep them for six years after the end of the year they relate to. The CRA may tell you in person or by registered mail to keep some records longer. If you want to destroy records early, you have to ask in writing and wait for permission.
Make them easy to reach. The CRA page on examinations says the books should be organized and accessible on paper or electronically. A folder per quarter, named the same way each time, is enough.
What happens after an examination?
The CRA sends a statement of account that explains what it found, with any penalties and interest. A serious problem can lead to a full audit, and you then get a notice of assessment or reassessment. If you disagree, the CRA says you can file an objection with Form GST159 within 90 days.
Be straight with the officer. The CRA itself asks for open and honest answers, and a clean paper trail makes that easy. For the cross-province side of the job, our guide to sales tax compliance across provinces covers registration and rates.
Where do the numbers come from?
The record keeping period, the examination steps and the objection form come from Canada Revenue Agency pages we read on 30 September 2026. Rates come from the CRA rate tables and our data file, which we rechecked on 29 September 2026. Penalty and interest amounts aren’t given here, because we didn’t confirm them. This website has no link with the CRA or any government.
Frequently asked questions
What does a CRA GST/HST examination review?
Your books and records, to confirm you calculated the tax collected, the input tax credits and the net tax correctly.
How long should I keep GST/HST records?
Six years after the end of the year they relate to, unless the CRA tells you to keep them longer.
Why does the CRA pick a business for examination?
The CRA names non-compliance and referrals among its reasons. We found no fuller public list, so avoid sources that claim one.
Can I object to an assessment?
Yes. The CRA says you can file an objection on Form GST159 within 90 days.
How often should I audit myself?
Once a year is a sensible habit. A quick quarterly spot check of a few invoices catches rate errors sooner.
- Dealing with the CRA: letters, audits and payments
Dealing with the CRA: what to do when a letter arrives, how a review differs from an audit, how My Account helps, and what to do if you can't pay
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.