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Sales Taxes  ->  GST/HST -> Are GST/HST costs tax deductible?

Not Registered to Collect GST/HST - are GST/HST Costs Tax Deductible?

If your business is not registered to collect GST, then you will not be able to claim any input tax credits to get a refund of the GST or HST you pay.  However, you can deduct the GST/HST for income tax purposes, as part of the cost of the item you have purchased.

For income tax purposes, the cost of an item will include the purchase price + GST or HST + provincial retail sales tax (where applicable).

When the item you have purchased is a fixed asset such as an automobile, then the cost including taxes is the amount to record as the cost of that item.  You will able to claim capital cost allowance on this amount.  

If the item purchased is an expense, then the cost including taxes will be recorded as the expense.

Revised: October 26, 2023


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