The recaptured input tax credit (RITC) threshold amount

In determining whether a particular person is a large business for a particular recapture period, the RITC threshold amount of that person for that recapture period will include:

1. the total of all amounts for taxable supplies made in Canada, or outside Canada through a permanent establishment in Canada, by the person and those amounts became payable, or were paid without having become payable, in the last fiscal year of the person that ended before the recapture period;
2. the total of all amounts for taxable supplies made in Canada, or outside Canada through a permanent establishment in Canada, by a GST/HST registrant that is associated with the particular person, and those amounts that became payable, or were paid without having become payable, in the last fiscal year of the associated person that ended before the recapture period; and
3. where, at any time in the 12-month period before the recapture period, the particular person purchased a business from another person that would be a large business in the absence of paragraph B, and under the agreement for the supply, acquired all or substantially all the property necessary for the particular person to carry on that business, the total of all amounts as determined by the following formula:

(E/F) × (365 - G)

where

E is the total of all amounts for taxable supplies made in Canada or made outside Canada through a permanent establishment in Canada by that particular person that became due or was paid to the person in relation to that business acquired by the person;
F is the number of days in the 12-month period immediately preceding the recapture period that are after that time; and
G is the number of days in the 12-month period immediately preceding the recapture period that are after that time and that are in the fiscal year referred to in paragraph A.

Note
In calculating an amount described in B above, a person must include the amount for taxable supplies made by an associated person that is not itself considered to be a large business (for example, an associated person whose main source of income is farming).

In calculating the amounts in A, B and C above, include:

• any amount by which the amount for a supply is reduced because of a trade-in of a good by the recipient of the supply;
• amounts that are for a supply made by a specified member of a qualifying group to another specified member of the same qualifying group, to the extent that the supply is considered to have been made for nil amount; and
• the fair market value of a supply made between persons not dealing at arm's length, to the extent that the amount for the supply is less than fair market value.

However, in calculating the amount described in A, B and C, the following amounts should not be included:

• an amount for the GST/HST, or for a provincial levy that is prescribed (for example, a provincial retail sales tax);
• an amount for a sale of real property that is capital property of the supplier;
• an amount for the supply of a financial service; and
• an amount for goodwill supplied as part of the supply of a business.

Note
If a person or its associates has a fiscal year that is shorter or longer than 365 days, the $10 million RITC threshold amount will be adjusted to reflect the length of that fiscal year.

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