The Canada Revenue Authority (CRA) and provincial tax authorities appear to be increasing their indirect tax audit activities, including “desk audits.”
To prepare for an indirect tax audit, taxpayers may consider a few indirect tax compliance issues that tax authorities commonly focus on during their audits, including:
- Providing the correct name on the invoice to claim input tax credits
- Holding companies—are holding companies entitled to input tax credits?
- Sales to non-resident companies are not always GST/HST-free
- Sales across Canada—do any indirect taxes (GST, HST, QST or PST) apply?
- Over-remitted tax or unclaimed input tax credits must be corrected on time