Time Limits on Claiming HST Input Tax Credits

When it comes to the Canada Revenue Agency, deadlines are the major source of stress for both personal and business filing. When these deadlines are met, the stress eventually dissipates, but if they are missed, you will often find yourself with lost money or worse, a debt.

GST/HST registrants may recover the GST/HST paid or owed on purchases and expenses related to commercial activities by claiming input tax credits (ITCs). Most registrants claim their ITCs when they file their GST/HST return for the reporting period in which they made their purchases. However, some registrants may have ITCs that were not claimed in their corresponding reporting period. Falling behind in claiming tax credits is not risk free. The Excise Tax Act limits registrants to claim any unclaimed ITCS within four years after the end of the reporting period in which the ITC could have first been claimed.

Example

You are a quarterly filer and you buy office furniture in the reporting period October 1, 2011, to December 31, 2011, for which you can claim an ITC. The due date of the return for this reporting period is January 31, 2012.

The last reporting period in which you can claim an ITC for the tax you were charged on the office furniture is the reporting period October 1, 2015 to December 31, 2015. The due date for this return is January 31, 2016. This means that you can claim the ITC in any return filed by January 31, 2016.

The time limit for claiming ITCs is reduced to two years for most listed financial and persons with annual taxable supplies of goods and services of more than $6 million for each of the two preceding fiscal years (except for charities and persons whose supplies of goods and services, other than financial services, during either of the two preceding fiscal years are at least 90% taxable supplies).

Documentation is key when claiming ITCs. To support your claim for ITCs, the invoices or receipts you use must contain specific information. Poorly documented ITCs may lead to audit troubles down the road.

Failing to file ITC claims within the statutory deadline permanently disqualifies the taxpayer from claiming them. Don’t get stuck with interest and penalties because you got behind the deadline to file - schedule your quarterly filing with plenty of time to spare.

For more information about what to do if you are behind filing your income tax credits please visit www.taxsolutionscanada.ca or call 1-888-868-1400.