19 March 2018 Interpretation 183900

A corporation now governed by the Canada Not-for-profit Corporations Act (“Corporation A”) was registered by telephone with an effective date of March 18, 2016, later changed at its request of January 1, 2016. It has now filed returns for its reporting periods ending on December 31, 2010 though to 2016, with the returns through to December 31, 2015 being cancelled as they were for reporting periods prior to the effective date of registration. Could Corporation A backdate its registration to April 1, 2010 so as to claim input tax credits for tax paid since then? CRA stated:

In order to backdate its registration, [Corporation A] could show it was a registrant during the period in question by proving it was not a small supplier; in other words, it was required to be registered. Its other option is to show it charged GST or HST on a consistent basis during that period on its taxable supplies.

If [Corporation A] can demonstrate that it qualifies to have its registration backdated, its request, including supporting documents, should be sent to: […]

Supporting documentation should include invoices showing the GST or HST charged to its clients or documents showing how and when it exceeded the small supplier threshold.

A not-for-profit corporation registered for GST/HST purposes effective March 18, 2016, then got this registration backdated somewhat to January 1, 2016 – and then subsequently filed returns for the previous six years (2010 through 2015) and requested that its registration be further backdated to April 1, 2010 in order that it could claim input tax credits for tax paid since April 1, 2010. The Directorate stated:

In order to backdate its registration, [Corporation A] could show it was a registrant during the period in question by proving it was not a small supplier; in other words, it was required to be registered.

The Directorate did not reference any limitation on claiming ITCs from before the four-year period referenced in ETA s. 225(4)(b), and instead stated:

Generally, a person who is registered for the GST/HST is entitled to claim input tax credits for the tax paid or payable by them on inputs that are used, consumed, or supplied in the course of its commercial activities. Where property or a service is consumed or used partly in the course of a person’s commercial activities and partly in its non-commercial activities (less than 90%, but more than 10% in its commercial activities), the person must apportion the GST/HST for the property or service between these two activities.