- The Tax Court of Canada ruled that CRA must consider all unclaimed carried-forward GST/HST input tax credits (ITCs) when reassessing “net tax,” not just those from the audited period.
- In Ontario Tire Stewardship v. The King, the taxpayer found about $1 million in additional omitted ITCs from prior periods, and CRA refused to allow them.
- The Court rejected CRA’s argument that section 296(2) only applies to ITCs arising in the specific reporting period under audit.
- The decision holds that “net tax” already includes ITCs carried forward from earlier periods, so reassessments must account for them.
Source: taxandtradelaw.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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