If you’re a Canadian business owner dealing with sales tax Canada filings or trying to understand how GST HST Canada rules really work, this might save you a painful CRA review. The number-one reason the Canada Revenue Agency revisits old GST/HST filings and sometimes charges more tax, interest, and penalties is when the revenue reported on your GST/HST return doesn’t match the revenue reported on your tax return.
Why CRA Reviews Happen
In my bookkeeping firm, I’ve seen this scenario more times than I can count. A client of mine recently received a letter in 2025 notifying her that her 2022 GST/HST Canada filings were being reviewed. Three years later.
That’s right. CRA’s system automatically scans every return it receives and compares the numbers. If the revenue on your GST/HST filings doesn’t align with what’s reported on your year-end tax return, it triggers a review, sometimes long after you’ve forgotten about it.
How CRA Sees Your Business
Here’s what’s important to understand: once you register for a GST number, the government assumes you’re collecting GST or HST on every dollar of business income. They don’t know what’s actually happening inside your business until you file your reports.
So, if you report $100,000 in total sales, the CRA expects to see the corresponding percentage of sales tax Canada revenue $5,000 if your province’s GST rate is 5%. But if your return shows only $4,000 in collected GST, the CRA’s computer system flags it and sends it for review.
Legitimate Reasons for Differences
Now, this doesn’t necessarily mean you did anything wrong. There are completely legitimate reasons your GST HST Canada filings may differ from your tax return. For example:
You had bad debt, an invoice that went unpaid and was written off before year-end.
You have non-taxable income in addition to taxable sales.
These are all valid explanations, but unless you communicate them clearly, CRA systems will assume you under-reported your sales tax.
How to Prevent a CRA Review
In my firm, we have a strict workflow to prevent these issues. Before my team files any GST/HST return, we double-check that the revenue on the profit and loss statement matches the revenue reported on the GST summary.
If there’s a mismatch, we investigate immediately. Sometimes it’s a legitimate reason that just needs documentation; other times, it’s a data entry error that needs correction. Either way, we don’t file until the two numbers line up.
That one extra step keeps the CRA off our clients’ backs and saves them from stress, reviews, and surprise tax bills years down the road.
The Bottom Line
The sales tax Canada system runs on automation, and CRA computers will always find discrepancies eventually. To avoid interest, penalties, and wasted time, make sure your GST/HST filings match your financial statements every single time.
You don’t have to love the process, but staying diligent now saves you from major headaches later.
Your future self will thank you for it.
