HST Recaptured ITC Phase Out
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.