OVERLOOKED INPUT TAX CREDITS (ITCs)

On June 23, 2026, CRA released an updated version of GST/HST policy statement P-149, Administrative Policy Regarding Adjustment to the GST/HST Return. CRA noted that, while a return can be adjusted on request, they may refuse the request in whole or in part. Specifically, CRA indicated that they will generally deny a requested change that consists solely of an increase to ITCs with no corresponding increase in tax for the same period.

CRA noted that the registrant can generally claim ITCs on a subsequent return within the allowable time limit, providing access to the ITCs with no amendment of prior returns. ITCs must generally be claimed in a return filed by the due date of the last reporting period that ends within four years after the end of the reporting period in respect of which the claim could first be made (Excise Tax Act Subsection 225(4)).

The ability to claim overlooked ITCs in subsequent GST/HST returns is counterintuitive to many practitioners due to the inability to adjust future income tax filings to offset past errors (see VTN 472(5596) for a court case where such an adjustment was disallowed, resulting in millions of dollars of deductions being lost).

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