Updated Requirements for Input Tax Credits

December 10, 2019

When sending or receiving invoices, ensure the name and business number of the supplier is listed or you may lose out on ITC claims.

Input tax credits (ITCs) are the sum of GST/HST paid on legitimate and reasonable businesses expenses. A business can claim ITCs to recover the GST/HST paid on purchases and expenses related to commercial activities. To claim ITCs, a business must be registered for GST/HST and track the amount of GST/HST paid on business related purchases and expenses.

Recently, the Canada Revenue Agency (CRA) is more stringent in their requirements for proving ITCs. Specific information on the invoices, receipts, contracts or other business papers must be provided to support eligible ITCs. There are a number of specific requirements including a date, total amount paid, a description of the goods or services and terms of payment. In addition to this list, any invoice you receive or send must include:

  • The supplier’s business or trading name
  • An indication of the total amount of GST/HST charged
  • An indication of which items are taxed at the GST rate and which are taxed at the HST rate
  • The supplier’s business number
  • the purchaser’s business or trading name

Without all of the information above, an ITC claim may be rejected by the CRA. Whenever sending or receiving invoices, ensure that all of the required information, especially the name and business number of the supplier is provided, or you may lose out on ITC claims if audited.

If you have any questions regarding ITC claims or any other corporate tax provisions, reach out to your Account Manager at Bateman MacKay LLP.

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