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Claiming ITRs and ITCs

Most registrants claim their input tax credits (ITCs) and input tax refunds (ITRs) when they file their GST and QST returns for the reporting period during which the purchases were made.

However, you generally have four years in which to claim your ITCs and ITRs for a given reporting period. This four-year period begins on the filing deadline for the return in which you could have claimed the ITCs and ITRs.

Example of a usual ITC and ITR claim

You are registered for the GST and the QST and file your returns on a quarterly basis. You made purchases in the course of your commercial activities in December 2018. You have until January 31, 2023 (that is, the deadline for the return covering the reporting period from October 1 to December 31, 2022) to claim ITCs and ITRs on the purchases you made in December 2018.

The four-year period is reduced to two years for listed financial institutions such as banks, insurers and trusts. The period is not reduced for corporations that are considered financial institutions because they made an election to have certain sales they make considered to be sales of financial services.

The period is also reduced for persons whose taxable sales during each of the two fiscal years preceding the fiscal year in question exceeded $6 million.

However, the period is four years for charities and businesses if 90% or more of their sales (excluding sales of financial services) made during either of the two fiscal years prior to the fiscal year in question were taxable sales.

  • If you elected to use the Quick Method of Accounting, you cannot claim ITCs or ITRs in respect of most of the purchases made in the course of your commercial activities. For more information, refer to The Quick Method of Accounting for Calculating GST and QST Remittances.
  • If you are a new registrant and were considered a small supplier prior to registering for the GST and QST, you can claim ITCs and ITRs in respect of certain property (such as capital property and inventory) in your possession at the time of registration. For more information, refer to New Registrants.
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Harmonized sales tax (HST)

Certain registrants that have claimed ITCs for HST paid or payable in Ontario before July 1, 2018, or in Prince Edward Island before April 1, 2021, may have to recapture the portion pertaining to the provincial component of the HST paid on the purchase of certain goods and services. This measure applies to registrants whose total annual taxable sales exceed $10 million, as well as to certain financial institutions.

For more information, refer to the following documents on the Government of Canada website:

  • GST/HST Technical Information Bulletin B-104, Harmonized Sales Tax – Temporary Recapture of Input Tax Credits in Ontario and British Columbia;
  • GST/HST Info Sheet GI-171, Phasing out of Recaptured Input Tax Credits in Ontario;
  • GST/HST Info Sheet GI-165, Prince Edward Island: Transition to the Harmonized Sales Tax – Builders and Recaptured Input Tax Credits.
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