Canada Revenue Agency
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GST/HST rebate for partners
As an individual who is a member of a partnership, you may qualify for the GST/HST partner rebate if:
- the partnership is a GST/HST registrant; and
- you personally paid GST/HST on expenses that:
- you did not incur on the account of the partnership; and
- you deducted from your share of the partnership income on your income tax return.
The rebate is based on the GST/HST you paid on expenses you deducted from your share of the partnership income on your income tax return. However, special rules apply if your partnership paid you an allowance for those expenses.
Examples of expenses subject to GST/HST are vehicle costs, meals, and entertainment. The rebate may also apply to the GST/HST you paid on motor vehicles, musical instruments, and aircraft, for which you deducted capital cost allowance (CCA).
The eligible portion of CCA is the part of the CCA that you deducted on your income tax return in the tax year, that relates specifically to a motor vehicle, musical instrument, or aircraft on which you paid GST/HST and that is eligible for the rebate to the extent that the partnership used the property to make taxable supplies.
If you deduct CCA on more than one property of the same class, you have to separate the portion of the CCA for the property that qualifies for the rebate from the CCA for the other property. If any part of the rebate relates to the CCA deduction for a motor vehicle, a musical instrument, or an aircraft, you have to reduce the undepreciated capital cost (UCC) of the related property by that part of the rebate.
File Form GST370, Employee and Partner GST/HST Rebate Application to claim your GST/HST rebate for partners. If you receive this rebate, you have to include it in your income for the tax year in which you receive it.
If in 2010 you receive a GST/HST rebate relating to the 2009 tax year (on your 2009 notice of assessment), you have to include the amount of the rebate on your income tax return for 2010:
- report the amount of the GST/HST rebate for partners that relates to eligible expenses other than CCA on line 9974 in Part 6 of your 2010 Form T2125, Statement of Business or Professional Activities; and
- in column 2 of Area A on page 4 of your 2010 Form T2125, reduce the UCC for the beginning of 2010 by the portion of the rebate that relates to the eligible CCA.
