Claiming ITRs and ITCs

If you are register for the QST for the GST and the QST, you may, as a rule, recover the amount of the taxes you paid on property and services that you purchased in order to sell taxable and zero-rated property or services. The GST is refunded as input tax credits (ITCs), the QST as input tax refunds (ITRs).

The term inputs refers to property or services used in the course of commercial activities, such as

• raw materials
• office furniture
• computer systems
• accountants' fees
• machine-repair costs
• promotional items

To be entitled to ITCs or ITRs, you must have been a registrant during the reporting period in respect of which you were required to pay the taxes.

You may claim your ITCs and ITRs when you file your GST and QST returns. However, you generally have up to four years in which to do so.

For more information, refer to the brochure General Information Concerning the QST and the GST/HST (IN-203-V).

Important

• If you are a small supplier, you may claim ITCs and ITRs only if you are a GST and QST registrant.
• If you sell only tax-exempt property or services (such as medical care), you are not entitled to claim ITCs or ITRs.
• If you are an individual, you may claim ITCs and ITRs in respect of personal property that you transfer to your business. However, if the value of the property at the time of the transfer is less than its value at the time it was purchased, you may be entitled to recover only a portion of the taxes, since ITCs and ITRs must be calculated on the basis of the property's fair market value at the time of the transfer.
• You are not entitled to claim ITCs and ITRs in respect of property and services purchased for personal use.
• If you use the quick method of accounting, you may claim ITCs and ITRs in respect of only certain purchases related to your commercial activities.