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Input tax credit.

How Canada handles business purchases: the buyer pays GST/HST and claims it back from the CRA on their own return, at no net cost.

What it means

How Canada handles business purchases: the buyer pays GST/HST and claims it back from the CRA on their own return, at no net cost.

What goes wrong

This is why there is no Canadian resale certificate. A US seller who charges nothing on a wholesale order into Canada because "they are a reseller" is assessed for tax they never collected — from a buyer who would not have minded paying it.

More in Tax

Every term here is one the protocol actually uses, defined for somebody who was never taught it — with the part that usually goes wrong. All terms →