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Ontario Restricted Input Tax Credits Move to 50% Restriction

For all large businesses in Ontario that are subject to the rules around Ontario Restricted Input Tax Credits, this is just a reminder that per the Ontario government’s phase out of the restrictions, the RITC’s reduce from 75% to 50% as of July 1, 2016. For more information on the phase out, please refer to GST/HST Info Sheet entitled “Phasing Out of Recaptured Input Tax Credits in Ontario – GI-171” or click here to access.

Ontario Restricted Input Tax Credits were first introduced on July 1, 2010 until June 30, 2018, with the phase out beginning on July 1, 2015. RITC’s limit the ability for large corporations to claim an ITC on the provincial portion of the HST on a specific list of items per below. Large corporations were defined as those making taxable supplies worth more than $10M annually.

The list of items where the ITC credit is restricted are:

  • qualifying motor vehicles, including certain vehicle parts and services, and in Ontario motive fuels for use in motor vehicles
  • specified energy
  • specified telecommunication services
  • specified meals and entertainment that are currently subject to an ITC repayment required of 50% under the Act.

To learn more about Ontario Restricted Input Tax Credits, consult GST/HST Technical Information Bulletin B-104.