Posted on June 16th, 2016 by Gregory M. Sawatsky in Commodity Tax (HST), Domestic Tax

Ontario HST Recaptured Input Tax Credit Phase Out – Reminder

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 meals & entertainment, specified energy costs, specified telecommunications, and certain vehicle expenses. This was reduced to 75% for the 2016 recapture period ended.   As the next recapture period is on the horizon (July 1, 2016 – June 30, 2017), this is a reminder that for this upcoming period, only 50% of the provincial component will now be required to be ‘recaptured’.

The remaining reductions of the recaptured amount will follow as outlined below:

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

Click here for a link to our previous article, as a reminder of the rules for your reference.

For those subject to the RITC regime and with the upcoming recapture period, it may be worth a reminder that only 50% of the 8% component of the HST will be required to be recaptured.


About the Author

Gregory M. SawatskyPartner | MAcc, CPA, CA

As a Partner in the tax services area, Greg provides GST/HST, corporate, personal and estate tax services for the Hamilton and Halton regions.
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