Online Tax Strategies−July 2018−ITC recapture: Phase-out update in Ontario and Prince Edward Island
It is finally happening! The ongoing compliance and recapture restrictions that large business have had to contend with since 2010 in Ontario are finally going away. While the changes are very welcome, ensuring your organization is prepared and correctly accounting for the change is almost as important as the initial reporting was to ensure that your organization is no longer absorbing the tax, or a portion of the tax, as a cost—a concept that effectively is contrary to the basics of a value-added tax regime.
The specific provisions previously applied to large businesses— organizations that exceeded $10 million in taxable and zero-rated revenues during their last fiscal year (including all sales made by associated entities). These organizations were required to recapture a portion of their input tax credits (ITCs) claimed in respect of the provincial part of the HST paid or payable on specified property and services in Ontario and Prince Edward Island.
Download the document below for more information.