Who is affected by the recapture of input tax credits (RITCs) requirement

Generally, only large businesses will be subject to the RITC requirement. For purposes of the RITC requirement, a person is considered to be a large business during a particular recapture period if the person is a GST/HST registrant and:

• the person's RITC threshold amount for that recapture period is greater than $10 million; or
• the person is one of the following financial institutions (other than a selected listed financial institution), or a person that is related to one of the following financial institutions (a specified financial institution): a bank; a corporation that is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as a trustee; a credit union; an insurer or any other person whose principal business is providing insurance under insurance policies; a segregated fund of an insurer; an investment plan; or the Canada Deposit Insurance Corporation.

A person that otherwise meets the criteria will be considered to be a large business even if the person does not have a permanent establishment in Ontario or in British Columbia (BC).

A public service body will not be considered to be a large business. Similarly, a person whose main source of income is farming, as defined in the federal Income Tax Act, will generally not be considered to be a large business to the extent that the person is acquiring, or bringing into Ontario or BC, a specified property or service for use in farming activities.

The following government entities will not be considered large businesses:

• an entity of the government of Canada that is not listed in Schedule I of the Federal Provincial Fiscal Arrangement Act;
• a department (as defined in section 2 of the Financial Administration Act); or
• an entity of the government of a province, that is eligible, pursuant to a provision of a sales tax harmonization agreement with that province, for a rebate of the GST/HST.
  

If a partnership is a large business and a member of the partnership (other than an individual) acquires, or brings into Ontario or BC, a specified property or service for use in one of these provinces, and that use is for the activities of the partnership (but not on account of the partnership), the member will generally be considered to be a large business for that acquisition or bringing in, if at that time, the member is a GST/HST registrant.

If a participant in a joint venture is a large business that has made a joint venture election with the operator of the joint venture, and the operator acquires, or brings into Ontario or BC, a specified property or service on behalf of that participant for use in one of these provinces, the operator will generally be considered to be a large business for that acquisition or bringing in.

Forms and publications

• GST/HST Technical Information Bulletin B-104, Harmonized Sales Tax - Temporary Recapture of Input Tax Credits in Ontario and British Columbia
• GST/HST Info Sheet GI-100, Harmonized Sales Tax: Builders and Recaptured Input Tax Credits
• Form RC4530, Election or Revocation of an Election to use a Production Proxy to Report the Recapture of Input Tax Credits
• Form RC4531, Election or Revocation of an Election to Use the Estimation and Reconciliation Method to Report the Recapture of Input Tax Credits