ITCS & SUPPORTING DOCUMENTS

We know that Input Tax Credits (ITCs) are a sum of the GST/HST collected. It allows for the taxpayer to recover some of the GST/HST they paid for on business expenses. In order to collect ITCs a taxpayer must be registered for a GST/HST account with the CRA.

For any ITC claims over $150 the following is supporting documentation that will be needed to accompany the invoice:

  1. Name of vendor
  2. Date of the invoice
  3. Total amount paid
  4. GST/HST number
  5. Amount of GST/HST charged
  6. Recipient’s name
  7. Terms of payment
  8. Clear explanation of each service provided

The CRA may reject any ITCs if proper documentation is not recorded.

There have also been tax schemes where a taxpayer has coordinated with a supplier to write out false invoices to increase the amount of ITCs collected. If this is suspected by the CRA, they will contact both the supplier and customer to verify that the transaction was legitimate.

The CRA may also disallow the ITCs even if the business is innocent or had no recollection of this happening.

This is general comment, and you should contact Tax Partners for any questions by sending an email to info@taxpartners.ca or (905) 836-8755. 

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