You may get a grant, subsidy or rebate from a government or a government agency to buy depreciable property. When this happens, subtract the amount of the grant, subsidy or rebate from the property's capital cost.

You may have paid GST/HST on some of the depreciable property you acquired for your business. If so, you may have also received an input tax credit from us.

The input tax credit is government assistance. Therefore, subtract it from the property's capital cost. If you get an input tax credit for a passenger vehicle you use in your business, use one of these methods:

• For a passenger vehicle you used 90% or more of the time for your business, subtract the amount of the credit from the vehicle's cost
• For a passenger vehicle you used less than 90% of the time for your business, do not make an adjustment in the current tax year. Instead, subtract the amount of the credit from your beginning undepreciated capital cost (UCC) of the next tax year

For information on claiming input tax credits for the GST/HST you paid to buy a passenger vehicle, see GST/HST Memorandum 8.2, General Restrictions and Limitations.

If you cannot apply the grant, credit or rebate you received to reduce a particular expense or to reduce an asset's capital cost, include the total on the line "Grants, credits, and rebates" in the income area on Form T2121.

Include the amount you claimed on line 108 of your GST/HST return only if you can't apply the grant, credit or rebate to reduce a particular expense or an asset's capital cost.

You may get an incentive from a non-government agency to buy depreciable property. If this happens, you can either include the amount in income or subtract the amount from the capital cost of the property. If the rebate is more than the remaining UCC in the particular class, add the excess to other income.

Forms and publications

• Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income
• Form T2121, Statement of Fishing Activities
• Form T2125, Statement of Business or Professional Activities
• Interpretation Bulletin IT-273, Government Assistance - General Comments

Related link

• Input tax credits