Will this receipt survive an audit?

An input tax credit is only as good as the paperwork behind it. The CRA sets three tiers of requirement by the size of the sale — and the thresholds moved to $100 and $500, so a lot of advice still circulating is wrong. Enter a receipt and see what it needs.

What the CRA needs, by size of sale

Being eligible in the first place

You can claim an input tax credit when all of these hold:

• You acquired the property or service for consumption, use or supply in your commercial activities
• You were a GST/HST registrant during the reporting period in which the tax was paid or became payable
• GST/HST was actually paid or payable by you
• You hold sufficient documentation before you make the claim, not after the CRA asks
• You claim within the time limit

That fourth point is the one that trips people up. The documentation has to exist at the time you file, so chasing a supplier for their registration number after an audit letter arrives is too late.

Limits that reduce what you can claim

Meals and entertainment — 50%

Claim half the GST/HST on business meals and entertainment, mirroring the income tax restriction. A $113 dinner in Ontario carries $13 of HST, and $6.50 of it is claimable.

Mixed business and personal use

Apportion by the percentage of use in commercial activities. A phone bill used 70% for business supports 70% of its tax. Keep whatever record justifies the split — the percentage is the thing an auditor will question.

Under the quick method

You give up ITCs on operating expenses altogether. Capital assets and real property still qualify. If you are not sure which method leaves you better off, the quick method calculator compares them.

How long you have

Most registrants have until the due date of the return for the last reporting period ending within four years after the end of the period in which the credit could first have been claimed. A quarterly filer who bought equipment in the October to December 2024 period can still claim it on any return filed by 31 January 2029.

The limit tightens to two years for listed financial institutions and for businesses whose threshold amounts exceed $6 million in both the current and previous fiscal year — with exceptions for charities and for businesses whose supplies are at least 90% taxable.

Common questions

Is a credit card statement enough?

Rarely. It shows the amount and date but not the tax, the supplier registration number, or a description of what was bought. For anything at or above $100 it will not carry the claim on its own.

What if the supplier will not give me their GST number?

Then a claim at or above $100 is unsupported. You can confirm a number a supplier does give you through the CRA GST/HST registry — worth doing for large or unfamiliar suppliers, since an invalid number fails the same way a missing one does.

Do I need paper, or are photos fine?

Electronic images are acceptable as long as they are readable and retained for the required period. Thermal receipts fade badly within a year or two, which is a good reason to photograph them the day you get them.