HST Recaptured ITC Phase Out

Posted on July 23, 2015 by djb | Posted in GST/HST

As you may remember, when the Ontario PST and GST were harmonized in 2010, large corporate groups with over $10,000,000 of taxable sales were subject to the recaptured input tax credit (RITC) regime.

For certain large businesses, since harmonization, 100% of the provincial component of the HST has been recaptured on expenses such as M&E, specified energy costs, specified telecommunications and certain vehicle expenses.  As the next recapture period is on the horizon (i.e July 1, 2015 – June 30, 2016), this is a reminder that for this upcoming period, only 75% of the provincial component will now be required to be ‘recaptured’.

The reductions of the recaptured amount will follow as outlined here:

  • 50% recaptured for the period from July 1, 2016 – June 30, 2017
  • 25% recaptured for the period from July 1, 2017 – June 30, 2018
  • 0% recaptured after July 1, 2018

Attached is a link to our article from last year as a reminder of the rules for your reference, http://djb.com/2014/07/ritc-reminder-and-check-up/

For those subject to the RITC regime and with the upcoming recapture period, it may be worth a reminder that only 75% of the 8% component of the HST will be required to be recaptured.

Article written by:  Greg Sawatsky, MAcc, CPA, CA

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