A qualifying financial institution must receive authorization to use particular input tax credit (ITC) and input tax refund (ITR) allocation methods for its residual inputs for each fiscal year. The application must be made using form FP-2116-V, Authorization for a Qualifying Institution to Use Particular Methods: Application, Renewal or Revocation.

If no authorization is received, the qualifying financial institution must determine its ITCs and ITRs using the following percentages:

• 12% for banks
• 10% for insurers
• 15% for securities dealers

Accordingly, a bank may claim ITCs and ITRs equal to 12% of the GST and QST paid on purchases of property or services used to make taxable and tax-exempt supplies.