Input Tax Credits and the Records CRA Expects You to Keep

Ontario charges 13% HST, Alberta charges 5% GST and nothing more, and Quebec’s combined rate runs to nearly 15%. If you register a business and start charging GST/HST on what you sell, input tax credits are what stops that tax from being a straight cost to you: broadly, a registered business can claim back the GST/HST it paid on its own purchases, so the tax only lands on the final consumer. The mechanism is simple. The records CRA expects a registrant to keep are where SA newcomers, used to a different system, tend to lose money.

The moment you register

The day your business becomes a GST/HST registrant, the clock starts on what counts as a valid input tax credit going forward. Only purchases used in your commercial activity qualify — not personal spending routed through a business account, which is a habit some newcomers carry over from managing a small SA business more informally.

What a claimable purchase actually looks like

The question of what can you claim input tax credits on has no single tidy answer: Cape2Canada’s research doesn’t hold a verified, current CRA threshold for exactly which categories of expense (meals, vehicle costs, home office) are fully or partially claimable. So can you claim ITCs on meals and vehicle costs specifically? Generally yes, but only partially. CRA applies different treatment to different categories, and those rules are detailed enough that they belong on CRA’s own site or with an accountant. What’s safe to say in general: CRA wants a receipt or invoice that shows the GST/HST registration number of the supplier, the amount of tax paid, and a description specific enough to show the purchase was for the business. A till slip with no supplier registration number on it is a weak claim.

Filing and claiming

You claim input tax credits when you file your GST/HST return, netting them against the tax you collected from customers. If your credits exceed what you collected in a period, you get the difference back rather than owing anything.

Going back for a missed claim

CRA gives registrants a window to claim an input tax credit you missed in an earlier period rather than forcing you to catch it in real time — the exact length of that window is a CRA rule Cape2Canada’s research doesn’t hold a confirmed figure for, so check the current limitation period on CRA’s site or with a bookkeeper before assuming an old receipt is still claimable.

If CRA denies a claim

A denial usually comes back to the paperwork: no registration number on the invoice, a purchase that reads as personal rather than commercial, or a description too vague to support the claim. CRA can ask for supporting documentation well after the fact, which is the real argument for filing receipts properly from day one rather than reconstructing a shoebox of them at tax time. Keeping digital copies as you go, with a note of what each purchase was for, costs almost nothing and saves a genuinely stressful afternoon later.

None of this is tax advice for your specific business — a Canadian accountant or bookkeeper who knows your industry will save you more than this article ever could. Cape2Canada’s What It Really Costs guide covers the broader tax and fee picture newcomers budget around when they arrive.