Large businesses that exceeded $10 million in taxable and
zero-rated revenues during their last fiscal year are required to
recapture a portion of their input tax credits (ITCs) claimed in
respect of the provincial part of the Ontario HST paid or payable
on specified property and services.1 The first stage of
the phase out of the recapture rate began on July 1, 2015. Starting
July 1, 2016, the second stage of this recapture rate phase out
will commence.
Specified property and services
Generally speaking, the specified property and services to which
the recaptured input tax credit (RITC) requirement applies include
specified road vehicles, energy, telecommunication services and
certain meals, beverages and entertainment (generally those subject
to the 50 percent income tax limitation). Failure to recapture ITCs
at the time and in the manner required can result in the imposition
of penalties. Penalties can be assessed for both under- or
over-reported RITCs.
