Simplified method to claim input tax credits (ITCs)

The Simplified Method for claiming ITCs is an alternative way for eligible registrants to calculate their ITCs.

When you use the Simplified Method, you do not have to show the GST/HST separately in your records. Instead, total the amount of your taxable purchases for which you can claim an ITC. You still have to keep the usual documents to support your ITC claims in case we ask to see them.

You can use the Simplified Method if your annual worldwide revenues from taxable goods and services (including those of your associates) are $500,000 or less in your last fiscal year.

Your total taxable supplies (including those of your associates) for all preceding fiscal quarters of the current fiscal year must also be $500,000 or less. These limits do not include goodwill, zero rated financial services, or sales of capital real property.

Also, you must have $2 million or less in taxable purchases made in Canada in your last fiscal year to qualify to use this method. The $2 million purchase limit does not include zero rated purchases, but it does include purchases imported into Canada or brought into a participating province.

If you are a public service body, you must be able to reasonably expect that your taxable purchases in the current fiscal year will not be more than $2 million.

If you qualify, you can start using the Simplified Method at the beginning of a reporting period. You do not have to file any forms to use it. Once you decide to use this method, you have to use it for at least one year if you continue to qualify.

For more information and instructions on how to use this method, review how the simplified method works.

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
• GST/HST Info Sheets GI-017, GST/HST Rate Reduction - Streamlined Methods of Accounting for Small Businesses
• GST/HST Info Sheets GI-041, The 2008 GST/HST Rate Reduction and Streamlined Methods of Accounting for Small Businesses