What are Input Tax Credits (ITCs) and how do I claim them?

Input Tax Credits (ITCs) are the mechanism by which GST/HST-registered businesses recover the GST/HST they paid on business purchases. ITCs prevent double taxation — you only remit the GST/HST you collected minus the GST/HST you paid on business expenses. For example, if you collected C$5,000 in HST from clients and paid C$1,200 in HST on business purchases (laptop, software, office supplies), your net remittance is C$3,800. To claim ITCs, you must: 1. Be registered for GST/HST 2. Have purchased goods or services for use in your business (not personal use) 3. Hold valid supporting documentation (receipts, invoices showing the supplier's GST/HST number) 4. Claim them within 4 years of when they arose If you use something partly for business and partly personally (e.g., a home internet connection), you can only claim ITCs for the business-use portion. ITCs cannot be claimed if you use the GST/HST Quick Method — that simplified method already accounts for this.

• ITCs let you recover GST/HST paid on business purchases
• Net tax = GST/HST collected minus ITCs
• Must hold valid receipts with supplier's GST/HST registration number
• Mixed-use purchases: claim ITC for business-use proportion only
• Claim within 4 years of the purchase date