How to calculate your ITCs
A way to keep track of the GST/HST you paid or owe is by adding a column to the purchases and expenses side of your records. You can use that GST/HST column total to calculate your input tax credits (ITCs) for each reporting period. You can only claim ITCs to the extent that your purchases and expenses are for consumption, use, or supply in your commercial activities.
To be eligible for an ITC, an expense or purchase has to be reasonable in quality, nature, and cost in relation to the nature of your business. The ITC also has to be based on a reasonable purchase price.
You cannot claim an ITC for taxable goods and services bought or imported to make supplies or for your personal use, consumption, or enjoyment.
You cannot claim an ITC for membership fees or dues to any club that mainly provides recreation, dining, or sporting facilities (including fitness clubs, golf clubs, and hunting and fishing clubs), unless the memberships are to resell in the course of your business.
Topics for How to calculate your ITCs - GST/HST
- New registrants
- Purchases and expenses for which you cannot claim ITCs
- Time limits for claiming ITCs
- Capital property
- Simplified method to claim input tax credits (ITCs)
- Passenger vehicles and aircraft
- Employee, partner, and volunteer expenses
- Meals and entertainment expenses
- Home office expenses
- Operating expenses
- Musical instruments
- Improvements to capital personal property
See Guide RC4022, General Information for GST/HST Registrants, for line-by-line instructions on completing your GST/HST return.
Forms and publications
- Guide RC4022, General Information for GST/HST Registrants
- GST/HST Memoranda Series Chapter 8-1, General Eligibility Rules
- GST/HST Memoranda Series Chapter 8-2, General Restrictions and Limitations
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