Digital Platform Sales-Tax Compliance Case Studies
6 worked Digital Platform Sales-Tax Compliance case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to digital platform sales-tax compliance work, not a specific client's file.
Case Study 1 · CRA review defended
$37,500 Proposed Adjustment Withdrawn In Full — Mixed-Supply Practice, London
Client: A professional practice with exempt and taxable supplies · Where: London, Ontario · Engagement: 7 weeks, fixed fee
Adjustment withdrawn$37,500
File closed in7 weeks
Penalties assessedNone
The situation — A professional practice with exempt and taxable supplies, London, Ontario
A professional practice with exempt and taxable supplies in London, Ontario received a proposal letter opening a review of digital platform sales-tax compliance. The CRA had identified a registration threshold crossed nine months before anyone registered and proposed an adjustment of $37,500, with 30 days to respond.
What we did for A professional practice with exempt and taxable supplies, London, Ontario
We treated the response as an evidence exercise rather than an argument. We backdated the registration to the day the threshold was crossed, remitted the tax owing, and applied for relief on the penalty portion, then indexed every supporting document against the specific line the auditor had questioned.
The result — A professional practice with exempt and taxable supplies, London, Ontario
The proposed adjustment was withdrawn in full — all $37,500 of it. The file closed in 7 weeks with no change to the assessed amounts and no penalty.
Case Study 2 · Planning that cut the bill
$42,000 Cut From The Annual Tax Bill — Digital Platform Seller, Guelph
Client: A platform seller collecting tax at checkout · Where: Guelph, Ontario · Engagement: 11 weeks, fixed fee
First-year saving$42,000
RepeatsAnnually
Filing positionUnchanged in risk
The situation — A platform seller collecting tax at checkout, Guelph, Ontario
A platform seller collecting tax at checkout in Guelph, Ontario was compliant but paying more than it needed to. The prior year had been filed correctly and still left input tax credits claimed on the exempt side of a mixed-supply business on the table.
What we did for A platform seller collecting tax at checkout, Guelph, Ontario
We modelled the current position against the alternatives before changing anything, then filed the section 156 election for the related registrants, so supplies between them stopped carrying tax that served no purpose but cash-flow drag.
The result — A platform seller collecting tax at checkout, Guelph, Ontario
The change saved $42,000 in the first year and repeats annually. Nothing about the filings became more aggressive; the position is simply the one the rules already allowed.
Case Study 3 · Records and systems rebuilt
15 Months Reconciled And $8,500 Of Input Tax Recovered — Wholesale Food Distributor, Halifax
Client: A wholesale food distributor · Where: Halifax, Nova Scotia · Engagement: 8 weeks, fixed fee
Months reconciled15
Input tax recovered$8,500
Close time10 days
The situation — A wholesale food distributor, Halifax, Nova Scotia
A wholesale food distributor in Halifax, Nova Scotia was carrying export sales zero-rated with no shipping documentation behind them. Nothing reconciled, and every filing started with 15 months of cleanup.
What we did for A wholesale food distributor, Halifax, Nova Scotia
We rebuilt from source rather than correcting on top of the existing file. We tested the quick method against the account’s actual input tax credit history and stayed on the regular method where the credits were worth more, then set the routine that keeps it clean.
The result — A wholesale food distributor, Halifax, Nova Scotia
15 months reconciled to the bank. The close now takes 10 days, and $8,500 of previously unclaimable input tax was recovered in the process.
Case Study 4 · Objection and relief
Notice Of Objection Allowed In Full, $87,000 Reversed — Freight Brokerage, Barrie
The situation — A freight brokerage, Barrie, Ontario
A freight brokerage in Barrie, Ontario had been reassessed for $87,000 and had 15 days left on the objection deadline. The reassessment rested on a sales tax account filed annually while the CRA had moved the business to quarterly.
What we did for A freight brokerage, Barrie, Ontario
We filed the objection inside the deadline with a complete submission rather than a placeholder, and set a defensible input tax credit allocation between taxable and exempt supplies and documented the method for future filings.
The result — A freight brokerage, Barrie, Ontario
The appeals officer allowed the objection in full. $87,000 was reversed and the account returned to a nil balance.
Case Study 5 · Backlog brought current
$137,000 Of Arbitrary Assessments Vacated After 7 Years — Late GST/HST Registrant, Hamilton
Client: A seller who crossed the registration threshold before registering · Where: Hamilton, Ontario · Engagement: 3 weeks, fixed fee
Arbitrary tax vacated$137,000
Years brought current7
Account statusCurrent
The situation — A seller who crossed the registration threshold before registering, Hamilton, Ontario
7 years of unfiled returns had turned into notional assessments at a seller who crossed the registration threshold before registering in Hamilton, Ontario, with management fees between two related registrants carrying tax that only ever went out and came back underneath. Collections had already started.
What we did for A seller who crossed the registration threshold before registering, Hamilton, Ontario
We self-assessed the tax on the real property acquisition in the correct reporting period and claimed the offsetting input tax credit in the same return, then filed every outstanding year in chronological order so the CRA could vacate the notional assessments cleanly.
The result — A seller who crossed the registration threshold before registering, Hamilton, Ontario
All 7 years were accepted as filed. $137,000 of arbitrarily assessed tax was vacated, collections action stopped, and the account is current for the first time in 7 years.
Case Study 6 · Missed incentive claimed
$133,000 In Credits Claimed That Prior Filings Had Missed — Interprovincial Construction Supplier, Windsor
Client: A construction supplier selling into three provinces · Where: Windsor, Ontario · Engagement: 11 weeks, fixed fee
Credits claimed$133,000
Years adjusted6
Review outcomeNo adjustment
The situation — A construction supplier selling into three provinces, Windsor, Ontario
A construction supplier selling into three provinces in Windsor, Ontario had been filing for 6 years without ever claiming the incentives its activity qualified for. Behind that sat a commercial property purchase closed on the assumption no tax applied because the vendor was not registered.
What we did for A construction supplier selling into three provinces, Windsor, Ontario
We tested each activity against the eligibility criteria rather than the description on the invoice, then rebuilt the sales ledger by customer province, applied the correct place-of-supply rate to each stream, and filed corrected returns before the CRA opened a review.
The result — A construction supplier selling into three provinces, Windsor, Ontario
$133,000 in credits claimed, with the open prior years adjusted as well. The claim passed review without adjustment.
Reviewed for the 2025 tax year by Udit Gupta, Founder and Tax Accountant. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
