What are the restrictions on ITCs for businesses?
Generally, large businesses (those making GST/HST taxable sales worth more than $10 million annually) will be required to limit Input Tax Credits they claim relating to the provincial component of the HST in respect of certain expenses including telecommunication services such as local and long-distance telephone, and cable services. Therefore, large businesses will not be able to recover the Ontario or British Columbia’s provincial portion of the HST paid on telecommunication services. It is important to note that internet access, web-hosting, and toll-free telephone services (1-800, 1-888, 1-877) will not be subject to the recapture, and full ITCs should be available to large businesses on HST remitted for such services. In addition, the rental of telecommunication equipment would normally not be subject to the recapture rule, provided it is invoiced as such.
