A partner in a registrant law firm (Great Law Firm LLP ) acquires a new computer primarily for use in its commercial activities using his personal credit card and, after presenting his receipt and credit card bill, is reimbursed, including the $252.07 he paid in GST/HST. Can the law firm claim an input tax credit (ITC) of $252.07, supported only by the receipt and its records for the partner’s reimbursement for these charges? Does it make any difference if the individual is an employee? CRA responded:
[U]nder subsection 175(1) … Great Law Firm LLP would be deemed to have paid, at the time the reimbursement is paid to the partner, tax in respect of the supply of the MacBook Pro equal to the total amount of tax reimbursed. As Great Law Firm LLP is a GST/HST registrant, it may claim an ITC, under subsections 169(1) and 199(2) of the ETA for the GST/HST paid by the partner.
...With respect to the documentary evidence, as Great Law Firm LLP is deemed to have acquired the Apple MacBook Pro, no additional supporting documentation is required where subsection 175(1) applies. Documentation identifying the partner, rather than the partnership, should satisfy the documentary requirements.
[T]he comments provided [above] would also apply to a reimbursement made … to its employee.
