Entrepreneurship & Small Business

Input Tax Credit (ITC) question

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  • Dec 9th, 2016 9:56 am
Newbie
Oct 25, 2013
9 posts

Input Tax Credit (ITC) question

Hi Fellas,

For the Input Tax Credit, does it have to be business related purchases that I've made DURING the same HST period? What about all the expenses (along with HST paid) that had incurred before the incorporation date? In case of a capital purchase under the CCA which amortize over 2-3 years, what should the treatment of the ITC be?

thanks a lot!!
2 replies
Newbie
Sep 11, 2012
89 posts
24 upvotes
ON
Lets see if I remember.

1) Yes the ITC's should be related to the same period (monthly, quarterly, or yearly however you have it set up).

2) You cannot claim ITC's unless you were already registered for GST/HST, note that this is not related to your incorporation date. The CRA has been willing to backdate registration by about a month in my experience. GST/HST paid before registration cannot be claimed as an ITC. If you were collecting GST/HST before registering it must be remitted to the CRA but you cannot claim ITC's until registered (from the registration date foreward).

3) Claim the ITC and the capital cost will be the cost + tax - ITC

4) Double check what I said, it has been a while
Member
Jun 25, 2011
336 posts
117 upvotes
Alberta
JifeLacket is right for most of the points. Just to add point 3, you are in non-participating province (means paying PST) then you can not include PST for ITC claim but if you paid HST then you claim ITC. Just remember passenger vehicle limit is max $30,000.

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