Input tax credit allocation methods
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Input tax credit allocation methods
As a GST/HST registrant, you may be eligible to claim input tax credits (ITCs) to recover the GST/HST payable, or paid without becoming payable, on inputs used to make taxable supplies. Generally, you cannot claim ITCs to recover the GST/HST paid on inputs used to make exempt supplies.
Special rules apply to financial institutions when calculating ITCs for the GST/HST 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 for the GST/HST 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 paid on the input that can be recovered by claiming an ITC.
Only for selected listed financial institutions
As a selected listed financial institution, you are generally not eligible to claim ITCs related to the provincial part of the HST 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 by using a formula referred to as the special attribution method.
For more information on ITC 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; and
- Technical Information Bulletin B-106, Input Tax Credit Allocation Methods for Financial Institutions for Purposes of Section 141.02 of the Excise Tax Act.
Forms and publications
- Date modified:
- 2013-01-25