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Certain large businesses are not entitled to claim input tax refunds (ITRs) for QST paid on
specified goods and services and may also be required to recapture some input tax credits
(ITCs) claimed for the provincial component of the HST paid in respect of the same types of
specified goods and services. A QST and GST/HST registrant is generally considered to be a
large business for a given fiscal year if the value of the taxable sales made in Canada by the
registrant and the registrant’s associates exceed $10 million during the immediately preceding
fiscal year. Various financial institutions are also considered large business regardless of the
value of their taxable sales.
The rules for the recapture input tax credits (RITCs) are similar to the restrictions for ITRs for
QST purposes. However, one significant difference is that a business subject to these rules
cannot simply forego claiming the ITCs subject to the RITCs. The business must claim the
ITCs and recapture the ITCs in the appropriate reporting period. Large businesses are generally
required to show the RITCs separately when filing their returns.
Specified Goods and Services Subject to ITR Restrictions and RITCs
Specified Goods
and Services
Qué.
1
Ont.
2
P.E.I.
3
N.S.
N.B.
Nfld.
Qualifying motor
vehicles under 3,000kg,
fuel (other than diesel
fuel) and some property
or services relating to
such vehicles
ITR
restrictions
RITCs
RITCs
N/A
N/A
N/A
Electricity, gas,
combustibles and steam
ITR
restrictions
RITCs
RITCs
N/A
N/A
N/A
Telephone and other
telecommunication
services (excluding
services related to
1-800, 1-888 or 1-877
telephone services and
Internet access)
ITR
restrictions
RITCs
RITCs
N/A
N/A
N/A
Meals and
entertainment
ITR
restrictions
RITCs
RITCs
N/A
N/A
N/A
Restrictions on QST Input Tax Refunds and HST Recapture Input Tax
Credit Requirements for Large Businesses and Financial Institutions
Notes
(1) The
Québec ITR restrictions will continue to December 31, 2017. The restricted ITR
restrictions will then be phased out from January 1, 2018 to December 31, 2021.
(2) The Ontario RITC requirements will continue to June 30, 2015. The RITC requirements will
then be phased out from July 1, 2015 to July 31, 2018.
(3) The P.E.I. RITC requirements will continue to March 31, 2018. The RITC requirements will
then be phased out from April 1, 2018 to March 2021.
© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Current as of May 3, 2013