GST/HST
Created by: Tanya Hilts
Modified on: Jan 4, 2024
Keeping Records
You have to keep records for each year you claim expenses. These records must include all of the following:
- A daily record of your expenses, together with your receipts and any cancelled cheques
- Any ticket stubs for travel
- Invoices
- Any monthly credit card statements
- A record of each motor vehicle you used for employment. This record must show both the total kilometres you drove and the kilometres you drove for employment purposes in the year
Your receipts for the purchase of merchandise or services have to show the following:
- The date you made the purchase
- The name and address of the seller or supplier
- Your name and address
- A full description of the goods or services you bought
- Information regarding the GST/HST you paid on your expenses, or the rate of tax if you are claiming the GST/HST rebate for employees
Keep a record of the motor vehicles or musical instruments you bought and sold because you may be able to claim capital cost allowance. This record has to show who sold you the motor vehicle or musical instrument, the cost, and the date you bought it.
If you sell or trade a motor vehicle or musical instrument, show the date you sold or traded it on your bill of sale. Also, show the amount you received from the sale or trade-in.
Generally, you have to keep your records (whether paper or electronic) for at least six years from the end of the tax year to which they apply.
Business Records
You are required by law to keep records of all your transactions to be able to support your income and expense claims. A record is defined to include an account, an agreement, a book, a chart or table, a diagram, a form, an image, an invoice, a letter, a map, a memorandum, a plan, a return, a statement, a telegram, a voucher, and any other proof containing information, whether in writing or in any other form.
Keep a record of your daily income and expenses. The Canada Revenue Agency (CRA) does not issue record books nor suggest any type of book or set of books. There are many record books and bookkeeping systems available. You can use a book that has columns and separate pages for income and expenses.
Keep your duplicate deposit slips, bank statements and cancelled cheques. Keep separate records for each business you run. If you want to keep computerized records, make sure they are clear and easy to read.
Income Records
Keep track of the gross income your business earns. Gross income is your total income before you deduct any expenses, including those related to the goods sold. Your income records must include the date, amount, and source of the income.
Record the income, whether you received cash, property, or services. Support all income entries with original documents.
Original documents include:
- Sales invoices
- Cash register tapes
- Receipts
- Bank deposit slips
- Fee statements
- Contracts
Note for farmers
Original documents for farming also include cash purchase tickets from the sale of grain, and cheque stubs from marketing boards.
Note for fishers
Original documents for fishing include sales slips for each landing, trip settlement sheets, and slips or records of sale to the public, retailers, and restaurants.
For an example of how to record your income, go to Example – Sales Journal – Month of July.
Expense Records
Always get receipts or other vouchers when you buy something for your business.
The receipts have to show the following:
- The date of the purchase
- The name and address of the seller or supplier
- The name and address of the buyer
- The full description of the goods or services
- The vendor's business number if they are a GST/HST registrant when the purchase price is $30 or more (before tax)
Make sure the seller or supplier describes the goods or services on the receipt. However, sometimes that is not possible, as with a cash register tape. In such a case, you should write a description of the goods or services on the receipt or other voucher, or in your expense journal.
It is also possible that a seller or supplier may not provide you with a receipt. In such a case, write the name and address of the seller or supplier, the amount paid for the goods or services, the date you made the payment and the details of the transaction in your expense journal.
Keep a record of the properties you bought and sold. This record should show who sold you the property, the cost, and the date you bought it. This information will help you calculate your capital cost allowance and other amounts.
If you sell or trade a property, show the date you sold or traded it and the amount of the payment or credit from the sale or trade-in.
For an example of how to record your expenses, go to Example – Expense Journal – Month of July.
Property records
If you sell or trade a property, show the date you sold or traded it and the amount of the payment or credit from the sale or trade-in.
Documentation Required Less than $100
Please note that to be 100% audit-proof, we do recommend providing all receipts; however, due to CRA wordings, we have decided to make the following internal changes to procedures:
Internal policy: Total amount paid or payable is less than $100 (Taxes included)
When agreed to by both CBS (Cloud Business Services) and the Client, CBS will not follow up on receipts or source documentation for costs below $100, taxes included, providing the following conditions exist:
- CBS and the Client both agree
- Total cost/charge is below $100, taxes included, (max $99.99)
- We have a proper receipt for this supplier/vendor within the most recent 12 months that shows the:
- Date
- Vendor/supplier name
- Description of purchase
- Total charged
- GST/HST charged
- GST/HST registration number
- The purchase must be from a bank account or credit card that we reconcile monthly, and listed on the bank/credit card statement
- The category or purchase must be consistently the same
- If the category may be different, we will ask for clarification of categorization on the ask client sheet
- Where the GST/HST may not be 13%, such as meals, we will ask for clarification, further details such as client has taken out, as well as a process without the GST/HST
Documentation Required More than $150
para 3(c) of the Input Tax Credit Information (GST/HST) Regulations
26. Where the total amount shown on the supporting documentation for the supply or supplies is $150 or more, the minimum prescribed information that must be obtained through the supporting documentation must first of all include all the information listed in paragraphs 19 and 23 as well as:
1. The recipient's name, the name under which the recipient does business (i.e., the trade name of the business), or the name of the recipient's duly authorized agent or representative,
2. The terms of payment, and
3. A description of each supply sufficient to identify it.
Additional information to support a claim for apportioned ITCs
Method of determining extent of use
ss 141.01(5)
34. In addition to the requirements discussed above, information that would enable the amount of the ITC to be determined where a method is used to allocate the extent of use would include:
- identifying the method of allocation used to apportion the ITCs;
- establishing that the method used is fair and reasonable in the circumstances; and
- establishing that the method is being applied consistently throughout the fiscal year.
35. Further information on apportioned ITCs and the methods of allocation is available in GST/HST Memorandum 8.3, Calculating Input Tax Credits.
ITC Information Requirements (Easy-to-read Chart)
Records you need to support your claim
Suppliers have to provide specific information on the invoices, receipts, contracts, or other business papers that they use when they supply taxable property and services to a GST/HST registrant purchaser. The purchaser needs this information to support their claims for ITCs or rebates for the GST/HST they were charged. In certain situations, the documentation requirements have been reduced. For more information, see Exceptions to the documentary requirements.
To ensure that your ITC claims only include GST/HST charged by someone who is registered for GST/HST, see Confirming a GST/HST account number. To confirm a QST number, go to Revenu Québec.
The following chart provides information that needs to be included on your receipts, invoices, or other documentation to support your claim: Access chart here
Multiple Claimants for ITC
28. On occasion, a supplier may enter into an agreement for the making of a single taxable supply with more than one person and invoice more than one person. If multiple persons are identified in a written agreement or on an invoice for the supply as having acquired the property or service, each such person may claim an ITC in respect of the proportionate amount of tax paid or payable to the extent that it is for consumption, use or supply in the course of each person's commercial activity. Generally, this is determined by reference to other documentary evidence such as letters, written agreements, or other definitive documentation.
29. When there may be a possibility that ITCs have been claimed by two persons in respect of the same supply, the CRA will review the records of both parties to ensure that the ITCs are claimed only by the person who is entitled to claim them.
GST/HST and First Nations peoples
The Canada Revenue Agency wants you to be aware of GST/HST requirements that apply to you as an Indian, an Indian band, or a band-empowered entity under the Indian Act. We recognize that many First Nations people in Canada prefer not to be described as Indians. However, the term Indian is used because it has a legal meaning in the Indian Act.
Paying or charging the GST/HST
In general, everyone has to pay tax in Canada, except when you are an Indian, Indian band, or band-empowered entity and you meet the conditions in Technical Interpretation Bulletin B-039, GST/HST Administrative Policy – Application of the GST/HST to Indians. This policy is consistent with section 87 of the Indian Act under which personal property of an Indian or a Indian band situated on a reserve and their interests in reserves or designated lands qualify for tax relief. Inuit and Métis people are not eligible for this exemption.
Access easy to read chart here
Incorrect GST/HST Registration Number Provided by Supplier
GST/HST charged – false or incorrect GST/HST registration number provided
24. Where the supplier charges GST/HST where the total amount paid or payable for the supply is $30 or more, and the supplier has provided a false or incorrect GST/HST registration number, the person acquiring the supply is not entitled to claim an ITC in respect of the supply. Although there is no provision in the Act establishing an obligation for a registrant claiming an ITC to verify the supplier's GST/HST registration number, a person may check a supplier's number on www.cra-arc.gc.ca/gsthstregistry or, if in Quebec, www.registreentreprises.gouv.qc.ca. A person may also call the CRA Business Enquiries line at 1-800-959-5525 or Revenu Québec to verify another person's number. The CRA or Revenu Québec, as the case may be, will give verbal or written GST/HST registration confirmation where there is a valid need to know that a person is a registrant. A letter of confirmation can be picked up in person by the requestor, mailed or faxed to a secure fax.
Ministerial discretion
ss 169(5)
25. Where a GST/HST registration number is not accurate and this fact is attributable to, for example, a clerical error, ministerial discretion may apply to validate the related ITC. The ministerial discretion rules established in subsection 169(5) are discussed in detail in paragraphs 42 and 43.