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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 collected reported, and can you prove it. Do it yearly. A rate wrong by 8 points on $10,000 of sales is $800 of tax.
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. No published list of triggers goes 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.
Where do rate mistakes usually come from?
Almost always from setup, not from arithmetic. A new customer in another province gets the default tax code. A rate changes and the software isn’t updated. A product gets entered once with the wrong code and then repeats on every invoice for a year. That’s why the sample should include your newest customers and your busiest product lines.
Say Tomas runs a small web shop out of Moncton and ships to buyers coast to coast. One stale tax setting for a single province can cost him a few hundred bucks over a year, and he’d never see it unless he went looking.
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. The guide Keeping Records (RC188) covers the six years and the permission rule.
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.
What does a sample tell you about a whole year?
A sample is only useful if you scale it. Say you issue 240 invoices a year averaging $2,000.00, and 3 of your 20 sampled invoices, or 15%, carried 5% GST where Ontario's 13% HST applied. That is a gap of 8 points, or $160.00 on each wrong invoice. At 15% of 240 invoices, about 36 invoices, the year's shortfall would be roughly $5,760.00 before interest. The numbers are invented to show the method, and a bigger sample gives a better estimate, so widen it when you find errors.
Which rates should the 2026 and 2027 checks use?
As of November 2026 the CRA table lists 13% HST in Ontario, 14% in Nova Scotia since April 1, 2025 and 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island. We found no announced change for 2027. The BC government says its planned PST on accounting, architectural, engineering and some other services is paused, in a notice dated September 21, 2026, and tells businesses that registered for that purpose to cancel the account. If you rely on small supplier status, recheck the $30,000 test, which the CRA applies to a single calendar quarter and to the last four consecutive quarters. For quick checks see reverse GST calculation and sales tax by province.
Where the numbers come from
The record keeping period, the examination steps and the objection form come from Canada Revenue Agency pages. Rates come from the CRA table of GST/HST rates, and the BC notice from the BC government PST page. All were checked in November 2026. Penalty and interest amounts are not given here, because we did not confirm them. We are an independent site, and no government body is behind it.
Frequently asked questions
What does a CRA GST/HST examination review?
Your books and records, to confirm that you calculated the tax collected, the input tax credits and the net tax correctly. An examination officer phones or writes to set an appointment and says which records to bring. The CRA says the books should be organized and accessible on paper or electronically.
How long should I keep GST/HST records?
Six years after the end of the year they relate to, unless the CRA tells you in person or by registered mail to keep some records longer. To destroy records early you must ask in writing and wait for permission. Keep sales and purchase invoices, receipts and bank statements that back each return.
Why does the CRA pick a business for examination?
The CRA names non-compliance and referrals from other parts of the agency among its reasons. We found no fuller public list of triggers, so avoid sources that claim one. A self-audit helps because it finds the mistakes an officer would look for first, such as a wrong rate or a missing invoice.
Can I object to an assessment?
Yes. The CRA says you can file an objection on Form GST159 within 90 days. A serious problem found in an examination can lead to a full audit and a notice of assessment or reassessment. Be open with the officer, and keep a clean paper trail so that your answers match your records.
How often should I audit myself?
Once a year is a sensible habit, and a quick quarterly spot check of a few invoices catches rate errors sooner. Include your newest customers and busiest product lines, since a default tax code or a stale rate in billing software repeats on every invoice and causes the largest gap.
- 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