Canada: Phase-out of recaptured input tax credits | KPMG | GLOBAL

Canada: Phase-out of recaptured input tax credits

Canada: Phase-out of recaptured input tax credits

During the last stage of the phase-out period for recaptured input tax credits under the Ontario harmonized sales tax (HST) beginning 1 July 2017, the recapture rate will be reduced to 25% (from 50%).

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Affected business may need to adjust various accounts and calculations related to the specified property and services subject to the recaptured input tax credit rules—including common area maintenance charges and employee expense accounts.

Quebec and Prince Edward Island

As Ontario prepares to eliminate recaptured input tax credits 1 on July 2018, Quebec and Prince Edward Island will shortly begin to phase-out similar rules. 

  • Quebec will begin a three-year phase-out period of the restrictions related to input tax refunds on 1 January 2018.
  • Prince Edward Island will begin a three-year phase-out of the province’s HST recaptured input tax credit rules starting 1 April 2018. 

Affected businesses may similarly need to consider preparing their systems for these upcoming tax changes.

 

Read a June 2017 report [PDF 64 KB] prepared by the KPMG member firm in Canada

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