Phasing out of recaptured input tax credits in Ontario

Phasing out of recaptured input tax credits in Ontario on July 1, 2015.

Since the introduction of the HST in Ontario, large businesses are subject to the temporary recapture requirement - i.e. reversal - of the 8% provincial component of the HST of the eligible input tax credits (ITCs) on certain goods and services such as motor vehicles, fuel used in these vehicles, electricity, gas, steam, certain telecommunications services and meals and entertainment.

A person is generally considered to be a large business during a particular recapture period if the person is registered for GST/HST and its taxable sales exceed $10 million or if the person is a specified financial institution, or is related to a specified financial institution.

The recapture requirement will be gradually phased out according to the following schedule:

Day on which the provincial part of the HST becomes payable without having been paid or is paid without having become payable

Ontario RITC recapture(reversal) rate

 July 1, 2010 to June 30, 2015  100%
 July 1, 2015 to June 30, 2016  75%
 July 1, 2016 to June 30, 2017  50%
 July 1, 2017 to June 30, 2018  25%
 July 1, 2018 and beyond  0%

It is important to note that the modification of the recapture rate must be reflected in the first return filed with respect to periods beginning on or after July 1, 2015.

For more information, you can consult the information guide published by the Canada Revenue Agency via the following link:

HST rate increase in Newfoundland and Labrador - Budget 2015-2016

The government of Newfoundland and Labrador announced in its last budget an increase in the rate of the HST from 13% to 15% as of January 1, 2016.

Search an Expert