• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 11/4/2013

Canada - Large businesses to recapture HST input tax credits 

November 4:  The Canada Revenue Agency has begun to audit business compliance with the recaptured input tax credit (RITC) rules as introduced with the Ontario and British Columbia HST (harmonized sales tax) on 1 July 2010.

Large businesses generally must remit to the CRA the provincial component of the HST claimed as input tax credits on four types of commodities:

  • Energy
  • Telecommunications
  • Meals and entertainment expenses
  • Motor vehicles

The RITC rules apply currently for Ontario and Prince Edward Island HST, and applied to British Columbia HST until 31 March 2013. Under these rules, a large business must recapture input tax credits—even if the input tax credits have not been claimed—and identify the amounts separately on its GST/HST return.

The RITC requirements for Ontario HST are effective until 1 July 2015, at which time the obligations will be phased out over three years.

Read an October 2013 report prepared by the KPMG member firm in Canada: Recaptured Input Tax Credits for HST — Time for a Check-Up

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