Claiming ITCs (Input Tax Credits) – What You Need

1. What Are Input Tax Credits (ITCs)?

If your business is registered for GST/HST, you’re allowed to recover the GST or HST you pay on business-related purchases. These recoverable amounts are called Input Tax Credits (ITCs).

In simple terms:
👉 You charge GST/HST to your customers and collect it for the CRA.
👉 You also pay GST/HST on your business expenses.
👉 You can claim ITCs to get back the GST/HST you’ve paid — reducing how much you owe to the government.

💡 Example:
If you collected $5,000 GST from your clients but paid $1,200 GST on your expenses, you only owe the CRA $3,800.

2. Who Can Claim ITCs?

You can claim ITCs if:
✅ You are registered for GST/HST with the CRA.
✅ The expenses are used to earn business income (not personal).
✅ You have valid receipts or invoices showing GST/HST paid.
✅ You claim them within four years from the filing period.

3. What Expenses Qualify for ITCs

Not all expenses qualify — but most business-related costs that include GST/HST do.
Here are some common examples small businesses can claim:

• Office supplies: pens, paper, computers, printers

• Software and subscriptions: QuickBooks, Zoom, Microsoft 365

• Rent or utilities: if you have a registered office

• Professional services: accounting, legal, consulting fees

• Advertising and marketing: social media ads, business cards, website hosting

• Vehicle expenses: gas, maintenance, insurance (business portion only)

• Home office expenses: internet, phone, heating, and electricity (portion used for business)

💡 Tip: You can’t claim ITCs for personal purchases — only the business-related portion.

4. What You Need to Claim ITCs

Before filing, make sure you have all the right documentation. CRA requires proper proof before approving your ITCs.
Here’s what you’ll need:

• Original receipts or invoices showing supplier’s name, date, and GST/HST number

• Proof of payment (bank statements, credit card records)

• Expense tracking records showing business purpose

• Mileage log (if claiming vehicle expenses)

• Contracts or agreements (for professional services or subcontractors)

💡 Pro Tip: Keep your digital receipts organized by category (e.g., “Office,” “Advertising,” “Vehicle”). It makes your CRA audit stress-free.

5. How to Calculate and Claim ITCs

When filing your GST/HST return, you’ll calculate:
GST/HST collected – GST/HST paid (ITCs) = Amount owed or refund due.

Here’s a simple breakdown:

DescriptionAmountGST/HST collected from clients$4,000GST/HST paid on expenses (ITCs)$1,200Amount owed to CRA$2,800

You can file your GST/HST return online through CRA My Business Account or let your accountant handle it.

6. Common Mistakes When Claiming ITCs

Avoid these common errors that can lead to CRA issues:

❌ Claiming ITCs for personal expenses
❌ Missing supplier GST/HST registration number on receipts
❌ Claiming without proper proof of payment
❌ Forgetting to claim within the 4-year limit
❌ Not adjusting for mixed-use expenses (e.g., personal and business use)

💡 Tip: If you’re unsure whether an expense qualifies, TiKi Tax can review your records and ensure everything meets CRA rules.

7. Why Work With TiKi Tax

At TiKi Tax, we specialize in helping small businesses, contractors, and self-employed Canadians:

✅ Identify all eligible ITCs you can claim
✅ Organize and verify your receipts
✅ File your GST/HST return accurately
✅ Maximize refunds and reduce CRA risks

With TiKi Tax, you don’t just file taxes — you file smart.

8. Final Takeaway

Claiming Input Tax Credits (ITCs) is one of the best ways to reduce your tax bill as a small business in Canada.
Keep good records, stay organized, and claim only what’s eligible.

If you’re unsure where to start, TiKi Tax can guide you every step of the way — from bookkeeping to CRA filing.