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Changes to ITC Information Requirements

Posted by on in Commodity Tax Blog
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In Budget 2021 the government of Canada proposed changes to the ITC Information Requirements which will generally make it easier for businesses to claim ITCs in two ways:

  1. increasing the dollar thresholds of the ITC Information Requirements; and
  2. expanding the definition of "intermediary" to include billing agents, such that a recipient can obtain the name and/or GST registration number of a billing agent rather than the underlying vendor in order to support an ITC claim.

Some details of these proposals, which are effective starting April 21, 2021, are set out below.

(1) Increasing ITC Information Requirement Thresholds

Pursuant to subsection 169(4) in order to claim an ITC for a reporting period the registrant must first:

obtain sufficient evidence in such form containing such information as will enable the amount of the input tax credit to be determined, including any such information as may be prescribed;

The requirement for certain prescribed information is found, in turn, in the Input Tax Credit Information (GST/HST) Regulations (the "ITC Regulations"), which prescribes three different "levels" of information requirements depending on whether the amount paid or payable is:

  • less than $30;
  • between $30 and $149.99; and
  • $150 or more.

Budget 2021 would increase these thresholds to:

  • less than $100;
  • between $100 and $499.99;
  • and $500 or more.

Practically this means that registrants generally need to collect less information than before in order to support an ITC claim in respect of supplies of less than $500.

(2) Inclusion of Billing Agents in definition of "Intermediary"

Currently the ITC Regulations permit a registrant to satisfy the information requirements by obtaining inter alia, the business name and registration number of the supplier "or the intermediary". Intermediary is defined in section 2 of the ITC Regulations as follows:

intermediary of a person, means, in respect of a supply, a registrant who, acting as agent of the person or under an agreement with the person, causes or facilitates the making of the supply by the person;

In Budget 2021 the government has broadened this definition to expressly include deemed billing agents under subsection 177(1.11).

Previously, billing agents did not qualify as intermediaries because they were generally not agents with respect to the making of the supply, but were limited agents for the purposes of charging/collecting (and with the appropriate election remitting) the GST/HST only.

Budget 2021 changes this, and treats billing agents equivalent to full agents for the purpose of the GST/HST information requirements, meaning that practically recipients can partially satisfy the ITC Information Requirements with the business name and GST registration number of a billing agent (as set out in s. 177(1.11)). This should simplify the information some recipients need to obtain in order to claim ITCs.

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