Input tax credits: claiming HST paid on gas and equipment purchases
By Julie King | January 20, 2014
This is my first time have to do my HST quarterly filing, just wondering if i can claim gas cost and equipment purchases?
Julie King answered:
When submitting your HST claim you can claim input tax credits (ITCs) for the HST paid on qualifying business expenses.
If you use your car for business, you can claim the HST on your gas costs as an input tax credit. Similarly, if you purchased equipment for use in the business, you can claim the HST you paid as an input tax credit.
Here are the rules provided by the Canada Revenue Agency (CRA):
A person may be able to claim an ITC with respect to property or a service if all the following criteria are met:
- Commercial use: the property or service must be acquired, imported or brought into a participating province by a person for consumption, use or supply in the course of the person's commercial activities;
- Registration status: the person must be a registrant during the reporting period in which the GST/HST on the property or service becomes payable by the person or is paid without having become payable;
- Supporting documentation: the person must have obtained sufficient documentary evidence to substantiate the ITC prior to making the claim in a GST/HST return;
- Payment: tax must be payable by the person in respect of the supply, importation or bringing in, or be properly paid by the person prior to its becoming payable; and
- Timing: the ITC must be claimed in a return filed within the time limit for claiming the ITC.
There are some restrictions for input tax credit in certain categories. The most obvious restrictions apply to HST on purchases made for your personal use or personal benefit.
There are also restrictions related to home offices, as well as memberships purchased for clubs that primarily have dining, recreational or sporting facilities.
For more in-depth information on CRA's eligibility rules, visit http://www.cra-arc.gc.ca/E/pub/gm/8-1/8-1-e.html.