Tax Audits, Appeals & Voluntary Disclosures

Audits & Appeals: An indirect tax audit should not be taken lightly. It can vary from a simple desk audit to a comprehensive review of all company transactions for the last four years (or longer).

When notified of an upcoming audit, contact MCO Partners for assistance in managing the audit process and minimizing the risk of a simple audit becoming a time-consuming comprehensive multi-year audit.

MCO Partners can also assist with preparing notices of objection when you do not agree with a CRA, Revenue Quebec, provincial sales tax, WSIB or EHT assessment. Note that the time limits for each may vary.

Voluntary Disclosure: The CRA’s voluntary disclosure program applies to all entities in Canada, including corporations. If there are errors on previous returns filed, and you have not yet been contacted by CRA with respect to any compliance issues, the filing of a voluntary disclosure may assist you in avoiding full penalties and interest. MCO Partners can also assist you in submitting a “no-name” voluntary disclosure protecting your identity (and limiting penalties and interest) until the formal disclosure is submitted.

Indirect Tax Recovery

Unrecovered or overpaid indirect taxes may have a direct impact on your bottom line if not claimed in time. Most indirect tax regimes in Canada allow for refunds of recoverable and overpaid indirect taxes to be made for prior periods.

MCO Partners’ experienced indirect tax professionals go beyond a general review of your accounts payable transactions to include a review of the entire indirect tax accounting and reporting process. Not only are recovery opportunities investigated, potential compliance issues are identified and corrective actions recommended.

Included in our recovery review:

-Identification of recovery opportunities using electronic data query and analysis
-Review and identification of potential compliance issues and liabilities
-Full report of our findings
-Recommendations for corrective action

Canadian Indirect Taxes

Indirect taxes may have a substantial impact on your cost of doing business in Canada if they are not considered prior to the initial cross-border transaction. Some of the issues to consider:

-Is your company carrying on business in Canada for GST/HST purposes?
-Should your company be registered for GST/HST purposes?
-Are sales made inside or outside Canada?
-In which province are sales made?
-Are you paying any GST/HST?
-Do your company have Canadian employees, or send non-resident employees into Canada?
-Where are your employees located, or being sent to, in Canada?

A company may be considered to be carrying on business in Canada for GST/HST purposes even though you may not have a permanent establishment in Canada. The circumstances of your company’s sales into Canada, made directly or through another party, should be reviewed in detail to ensure all indirect tax obligations have been identified and addressed.

The indirect tax professionals at MCO Partners have been dealing with the indirect tax implications of carrying on business in Canada since the inception of the GST in 1991 and can provide hands-on assistance in navigating through the complexities of cross-border transactions. Our close proximity to the border allows us to meet with you on relatively short notice.

Indirect Tax Compliance

Indirect taxes have an impact on almost all transactions including sales, leases, expenditures, corporate acquisitions and reorganizations, imports, exports and employee remuneration. The numerous indirect tax programs throughout Canada with their varying rates, applications and reporting requirements must be addressed when planning for future activities in addition to current reporting and filing requirements. Most transactions involve the application of one or more indirect taxes such as GST/HST, QST and provincial sales tax, as well as WSIB and EHT when employee remuneration is involved.

MCO Partners can assist you with:

-Understanding the rules and their application to specific situations such as
-Business acquisitions and reorganizations
-Real property transactions
-Joint ventures and partnership activities
-Cross-border transactions
-Preparation and timely filing of returns
-Preparation of technical interpretation and ruling requests
-Staff training