What is an input tax credit?

An input tax credit (ITC) is the GST/HST you paid on business purchases that you claim back on your GST/HST return. You subtract it on line 106 from the GST/HST you charged customers. If your credits are bigger than the tax you charged, for example because you mostly export to the US, the CRA refunds the difference.

Who can claim input tax credits?

Only GST/HST registrants, for purchases made while registered and used in their commercial activities. Small suppliers who aren't registered can't claim ITCs. When you first register, you can also claim the GST/HST on inventory and equipment you still have on hand, but not on services or rent from before you registered.

What receipts do I need to claim an input tax credit?

Under $100: the supplier's name, the date and the total. From $100 to $499.99: also the supplier's GST/HST registration number and the GST/HST charged, or a note that tax is included. $500 or more: also your name, the payment terms and a description of what you bought.

How long do I have to claim an input tax credit?

For most small businesses, four years. You can claim an ITC on any return due and filed by the due date of the return for the last reporting period that ends within four years after the period in which you could first have claimed it. Some very large businesses have only two years.

Can I claim PST or QST as an input tax credit?

No. Input tax credits only cover GST and HST. BC PST, Saskatchewan PST and Manitoba RST paid on business purchases are generally a cost to your business. QST-registered businesses claim QST back separately from Revenu Québec as input tax refunds.

Can I claim input tax credits on US sales?

Yes. Goods you ship to US customers are zero-rated exports, so you charge 0% GST/HST but can still claim back the GST/HST on the costs of making those sales. That's why sellers who mostly export often get a GST/HST refund every period.

Input Tax Credits (ITCs): Claim Back GST/HST

Short answer: an input tax credit (ITC) is the GST/HST you paid on business costs, claimed back on line 106 of your GST/HST return. Registered online sellers can claim the GST/HST on inventory, packaging, platform fees, shipping labels, equipment and advertising, as long as they were used for the business and you have the right receipts. You usually have four years to claim. PST and QST don’t count.

This guide is for registered Canadian online sellers on Shopify, WooCommerce, BigCommerce, Etsy and Amazon. If you’re not registered, you can’t claim ITCs. See the $30,000 threshold and whether voluntary registration makes sense for you.

Can you claim it? Find your situation

Purchase	Claim the GST/HST?	Notes
Inventory and materials (wax, fabric, clay, finished goods for resale)	Yes
Packaging, labels, boxes, tissue	Yes
Domestic shipping labels (Canada Post, couriers)	Yes, if GST/HST was charged	International postage is usually zero-rated, so there’s nothing to claim
Store and marketplace fees (Shopify plan, apps, Etsy fees)	Yes, if GST/HST was charged	Etsy charges GST/HST on its fees to Canadian sellers
Advertising, software, website hosting	Yes, if GST/HST was charged	Give foreign suppliers your GST/HST number. See below
Equipment: printer, sewing machine, kiln, computer	Yes, in proportion to business use	Capital property can be claimed even under the Quick Method
Phone, internet, home office	Partly	Only the business-use share
Meals and entertainment	50%
Personal purchases	No
BC PST, Saskatchewan PST, Manitoba RST	No	Not GST/HST
Purchases from a supplier who isn’t GST/HST-registered	No	Check them in the GST/HST Registry
Costs of making exempt sales (for example music lessons)	No
Costs of making zero-rated sales (exports to the US)	Yes

The four conditions

The CRA allows an ITC when all of these are true:

You bought the goods or services for your commercial activities: making taxable or zero-rated sales.
You were a GST/HST registrant when the tax was paid or became payable.
GST/HST was actually paid or payable by you.
You had the right documents before you made the claim, and you claim within the time limit.

The expense also has to be reasonable for your kind of business.

Receipts you need

What the invoice or receipt has to show depends on the total, including tax:

Information	Under $100	$100 to $499.99	$500 or more
Supplier’s name (or intermediary’s)	✔	✔	✔
Invoice date	✔	✔	✔
Total amount paid or payable	✔	✔	✔
GST/HST charged, or a statement that the price includes it		✔	✔
Which items are taxable, if the invoice mixes taxable and exempt		✔	✔
Supplier’s GST/HST registration number		✔	✔
Your name (or your agent’s)			✔
Brief description of what you bought			✔
Payment terms			✔

Download the invoices for platform fees every month or quarter. Shopify, Etsy and most app and ad platforms let you export them from your billing settings, and they’re easy to lose track of.

Worked example: one quarter of ITCs

Prairie Bloom is a Saskatoon business selling dried-flower arrangements through Shopify. It files quarterly. In July to September 2026 it paid:

Purchase	Before tax	GST 5%	ITC claimed
Dried flowers and supplies	$3,200	$160	$160
Boxes and packaging	$900	$45	$45
Shopify plan and apps	$420	$21	$21
Domestic shipping labels	$1,600	$80	$80
New laptop (80% business use)	$1,500	$75	$60
Client lunch with a wedding planner	$120	$6	$3 (50%)
Total			$369

Prairie Bloom puts $369 on line 106. It also paid $90 of 6% Saskatchewan PST on the laptop. That isn’t claimable as an ITC: it’s simply part of the laptop’s cost. (Prairie Bloom doesn’t pay PST on the flowers and boxes it resells, because it gives those suppliers its own Saskatchewan PST number. See Saskatchewan PST.)

Time limits

Who	Deadline to claim an ITC
Most businesses, including almost every small online seller	On a return due and filed by the due date of the return for the last reporting period that ends within 4 years after the period you could first claim it
Businesses with taxable sales over $6 million in both the current and previous year (unless 90%+ of their sales are taxable), and some listed financial institutions	2 years, counted from the end of the fiscal year

Example: a quarterly filer who buys equipment in October to December 2024 can claim the ITC on any return filed by January 31, 2029.

So if you forgot to claim a Shopify invoice last year, you don’t need to amend the old return. Claim it on your next one.

Starting out: ITCs when you first register

When a small supplier registers, it can claim ITCs on:

inventory it has on hand on the effective date of registration, and
capital property, like equipment, still used in the business.

It can’t claim the GST/HST on services it received, or rent for periods, before registration. If you prepaid January to March rent and registered on March 1, only March counts.

Foreign suppliers and ad platforms

Some foreign digital businesses, such as overseas software and ad platforms, collect GST/HST from Canadian customers under a simplified registration system. They shouldn’t charge GST/HST to a GST/HST-registered business that gives them its registration number.

If you don’t give them your number and they charge you GST/HST anyway, you can’t claim it as an ITC or get a rebate. Add your GST/HST number in the billing or tax settings of every foreign software, app or ad account that asks for it.

Common mistakes

Claiming PST. BC PST, Saskatchewan PST and Manitoba RST are never ITCs.
Claiming tax a supplier wasn’t entitled to charge. If the supplier isn’t registered, the “GST” on its invoice isn’t claimable. Check the Registry for big purchases.
Missing GST/HST numbers on $100+ invoices. Ask the supplier for a proper invoice before you claim.
Claiming 100% of personal-and-business items. A phone or car used half for the business gets half the ITC.
Forgetting the meals limit. Only 50% of the GST/HST on business meals and entertainment.
Claiming on the Quick Method. Under the Quick Method, you don’t claim ITCs on operating costs. Only capital property.
Losing receipts. Keep records for six years. The CRA can deny ITCs you can’t document.

Official sources

Input tax credits, Canada Revenue Agency
GST/HST Registry, Canada Revenue Agency
GST/HST on imports and exports, Canada Revenue Agency