After suspending most audits for the early part of 2020 due to the COVID-19 pandemic, the Canada Revenue Agency (the “CRA”) has been slowly but steadily gearing up its audit activity through 2020 and the first half of 2021. This is expected to continue through the second half of 2022 as the CRA resumes a regular level of audit activity.

While the CRA always has a number of different audit priorities on the go simultaneously, Budget 2021 specifically announced an additional $304.1 million in funding for the CRA spread over five years for, among other things, GST/HST audits of large corporations.

This announcement seems, at least in part, designed to reverse the decline in new corporate audits which recently made headlines when it was reported that new large corporation audits dropped by over 30% from 2016/2017 (6,281 new audits) to 2019/2020 (4,257 new audits).

All of this is expected to result, at least in part, in the hiring/promotion of additional GST/HST auditors to staff the increase in GST/HST audits of large corporations.

What do Large Corporations Have to Worry About?

Given the complexity of the GST/HST, non-compliance can take a wide variety for forms. The vast majority of non-compliance is inadvertent and stems from well-intentioned people within the corporation who simply do not understand the intricacies of the GST/HST legislation.

Large corporations typically face a number of common GST/HST issues including:

If the CRA commences an audit of your corporation, it is best to obtain legal representation as soon as possible to protect your rights during the audit when dealing with the CRA auditor. This is particularly important with large corporation audits which last substantially longer and can involve significantly more complex issues than audits of small and medium enterprises.


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