Simplified method to claim input tax credits (ITCs)

You can use the simplified method for claiming ITCs if your annual worldwide revenues from taxable goods or services (including those of your associates) are $500,000 or less in your last fiscal year.

Your total taxable sales or 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.

In addition, 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 includes purchases imported into Canada or brought into a participating province.

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.

Under the Simplified Method for claiming ITCs, you do not have to show GST/HST separately in your records. You only need to total the amount of your taxable purchases for which you can claim an ITC. However, you have to keep the usual documents to support your ITC claims for audit purposes.

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