Input Tax Credits (ITCs): How to Recover Paid Taxes

The Power of ITCs for Your Bottom Line

If you are a registered business, GST/HST isn't just a cost—it's often recoverable. Understanding ITCs is the key to maximizing your cash flow.

What Qualifies for ITCs?

Most legitimate business expenses qualify, including:

• Rent and utilities for business premises
• Office supplies and equipment
• Business travel and 50% of meals/entertainment
• Professional fees (accounting, legal)
• Inventory for resale

How to Calculate ITCs

1. Track all GST/HST paid on business receipts.
2. Track all GST/HST collected from customers.
3. Net Tax = Collected - Paid (ITCs).

If you paid more than you collected, the CRA will issue you a refund.

Common Pitfalls

You cannot claim ITCs for personal expenses, or if you are not registered for a GST/HST number. Keep supporting records for at least 6 years after the end of the relevant tax year.

Use reverse mode to isolate ITCs from tax-in receipts →

FAQ: ITCs

What if I forgot to claim an ITC?

You generally have up to four years to claim a missed ITC on a future GST/HST return.

Can I claim ITCs on gas?

Yes, if the vehicle is used for business purposes, the GST/HST portion of fuel costs is eligible.

Source

• CRA: Keeping records