Calculating input tax credits - Overview

Overview
Types of purchases and expenses
Percentage of use in commercial activities
ITC eligibility percentage
Methods to calculate the ITCs


Overview

As a registrant, you recover the GST/HST paid or payable on your purchases and expenses related to your commercial activities by claiming an input tax credit (ITC). You may be eligible to claim ITCs only to the extent that your purchases and expenses are for consumption, use, or supply in your commercial activities. To claim an ITC, the expenses or purchases must be reasonable in quality, nature, and cost in relation to the nature of your business.

To calculate your ITCs, you need to:

  • know the type of purchases and expenses for which you may be eligible to claim an ITC
  • determine the percentage of use in your commercial activity
  • determine the amount of GST/HST you can claim as an ITC for different type of expenses
  • calculate using the regular or simplified method 
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