Canada CRA Tax Review: Practical Compliance Checklist for BusinessesPosted on December 02, 2025

This article summarizes the key items that are frequently reviewed by the CRA and outlines practical steps that businesses can take to prepare. If you have a basic understanding of your company’s tax obligations, this checklist will help you identify any gaps before an issue arises.

1. Ensuring Consistency Between GST/HST Filings and Accounting Records

When reviewing GST/HST filings, the CRA cross-checks reported sales, tax remittances, accounting records, and POS data to ensure there are no discrepancies. Mismatches between electronic invoices, sales systems, and accounting software may trigger further review. To prepare for a tax audit, the following items should be reviewed in advance:

• Reported sales match the revenue recorded in accounting and POS systems

• Tax remittances align with the amounts charged and collected

• Input Tax Credit (ITC) claims are fully supported by proper documentation

2. GST/HST Self-Assessment for Overseas SaaS and Cloud Services

If digital services purchased from foreign providers (e.g., AI tools, SaaS platforms, accounting or design software, data analytics tools) are used in Canadian business activities, the business may be required to self-assess GST/HST under certain conditions. This item is frequently overlooked and often appears during CRA reviews. Businesses should prepare the following:

• Organized invoices from foreign service providers

• Documentation showing the service was used for Canadian business purposes

• GST/HST self-assessment filings (e.g., Form GST59), if applicable

3. Proper Classification of Independent Contractors

The CRA determines worker status based on the total relationship approach, focusing on the actual working relationship rather than the contract wording. If a contractor functions in a manner similar to an employee, CPP/EI obligations may apply retroactively. Businesses should review the following:

• Whether contractor agreements align with CRA guidelines

• The degree of control over work, supervision, and tools provided

• Whether contractors operate as independent businesses with multiple clients

4. Accuracy and Completeness of SR&ED Documentation

Companies claiming SR&ED (Scientific Research & Experimental Development) tax credits must provide detailed technical explanations and contemporaneous documentation for each project. The CRA places significant emphasis on the clarity and completeness of these records. Businesses should prepare the following:

• Project-specific technical goals and documentation of attempts and failures

• Real-time development logs, version histories, meeting notes, and test results

• Supporting documentation prepared in accordance with CRA’s guidelines

5. Record-Keeping Systems and Audit Preparedness

The CRA requires businesses to keep tax-related records for at least six years, including electronic files, emails, and cloud-stored documents. When documents are dispersed across multiple systems or personnel changes disrupt record continuity, audit responses can become challenging. Businesses should check the following:

• Centralized storage and access control for accounting and tax documents

• Consistent document-sharing practices across departments

• Internal audit procedures or simulation processes to ensure preparedness

The CRA may initiate a review without prior notice, and the increased use of electronic document submissions has made record accuracy, consistency, and traceability more important than ever. Beyond filing tax returns correctly, businesses must ensure that internal records fully support the information reported to the CRA. Regular internal reviews, periodic consultations with external accountants, and strong documentation practices can significantly reduce risk.

Rise Partners supports businesses by providing practical, operations-focused assistance such as GST/HST consistency checks, SR&ED documentation preparation, and contractor classification reviews to help identify tax-related risks and ensure that companies are ready to respond effectively when needed.