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Canadian Commodity Tax (GST/HST/QST/PST) Update

by DMA Staff | May 11, 2018
Canada Commodity Tax Update

Ontario 13% HST – Recaptured Input Tax Credit – Ontario “Phase-Out”

The Ontario Recaptured Input Tax Credit (RITC) rate that applies to large businesses will continue to be phased out from 25% to 0% effective July 1, 2018. Businesses impacted by the phase-out will need to adjust their systems to accommodate this change.

 GST/HST Input Tax Credit Audit Issues      

Businesses should take extra care to ensure they are meeting the documentary requirements to support GST/HST Input Tax Credit (ITC) claims. In addition to obtaining sufficient documentation (invoice, statement, receipt etc.) with prescribed information on the document (recipient name, vendor name, vendor GST/HST registration number, total payable, date of invoice, tax payable, terms of payment and description of supply) taxpayers are required to validate a vendor’s GST/HST Registration number. Failure to do so may put ITC claims at risk on audit. 

Refer to both S. 2 and 3 of the Input Tax Credit Information (GST/HST) Regulations for a complete listing of what is required to support ITC claims. 

GST/HST Tax Savings Opportunities

A friendly reminder from your trusted adviser to not overlook GST/HST tax savings opportunities in areas outside the traditional Accounts Payable vendor invoice process. DMA has extensive experience recovering hidden GST/HST ITCs in the following areas:

  • Registered Pension Plans
  • Employee Medical Expense Benefit programs
  • Customer incentives (loyalty, points, coupons, gift cards)
  • Vendors that provide Invoice Management services in areas such as freight and utilities

Learn More About DMA's Commodity Tax Review Service