Input tax credit and input tax refund allocation methods
Disclaimer
We do not guarantee the accuracy of this copy of the CRA website.
Scraped Page Content
Input tax credit and input tax refund allocation methods
As a GST/HST and QST registrant, you may be eligible to claim input tax credits (ITCs) and input tax refunds (ITRs) to recover the GST/HST and QST payable, or paid without becoming payable, on inputs used to make taxable supplies. Generally, you cannot claim ITCs or ITRs to recover the GST/HST and QST paid on inputs used to make exempt supplies.
Special rules apply to financial institutions when calculating ITCs and ITRs for the GST/HST and QST paid or payable on their inputs. Generally, as a financial institution, when you use an input exclusively in the course of making taxable supplies, you can claim a full (100%) ITC and ITR for the GST/HST and QST you paid to acquire the input. However, if you use an input in the course of making both taxable and exempt supplies, you have to allocate its use between those taxable and exempt supplies to determine the percentage of the GST/HST and QST paid on the input that can be recovered by claiming an ITC or an ITR. For QST purposes, financial institutions will use the same allocation method as they use to determine eligible ITCs for GST/HST purposes.
As a selected listed financial institution, you are generally not eligible to claim ITCs related to the provincial part of the HST or ITRs related to the QST payable, or paid without becoming payable, on inputs used to make taxable supplies. These amounts are taken into consideration when you calculate and report your net tax for the GST/HST and for the QST by using aformula referred to as the special attribution method.
For more information on ITC or ITR allocation methods for financial institutions, see:
- Technical Information Bulletin B-098, Application of Section 141.02 to Financial Institutions That Are Qualifying Institutions;
- Technical Information Bulletin B-099, Application of Section 141.02 to Financial Institutions That Are Not Qualifying Institutions;
- Technical Information Bulletin B-106, Input Tax Credit Allocation Methods for Financial Institutions for Purposes of Section 141.02 of the Excise Tax Act; and
- Finances Québec - Information Bulletin 2012-4, Changes to Québec's Tax System Pursuant to the Undertakings to Harmonize it With the Federal Tax System Applicable in 2013.
- Date modified:
- 2013-01-25