- Propertystill held for your business when you register: claim its basic tax content
- AfterPrepaid services or rent: only the part after your registration date
- 30 daysA voluntary registration can usually start up to 30 days before you apply
Partly
You can't claim GST/HST on services you used, or rent for a period, before your registration date. But if you were a small supplier, you can claim input tax credits for property you still hold for your business when you register, such as a computer or inventory, based on its basic tax content. You can also claim GST/HST you prepaid on services or rent for the period after you register.
A common belief is that input tax credits only "start adding up" once you're registered. That's mostly true, but not completely. The Excise Tax Act has special rules for new registrants who were small suppliers just before they registered.
Those rules let you recover some GST/HST you couldn't claim back while you were a small supplier.
What you can and can't claim
- Can claim GST/HST on property you still hold for your business when you register, such as a computer, tools or inventory. The amount is based on its basic tax content.
- Can claim GST/HST you prepaid on services, rent or royalties, for the part that covers the period after you register.
- Can’t claim GST/HST on services supplied to you before you registered, even if you pay the bill afterwards.
- Can’t claim GST/HST on rent, royalties or similar payments for the period before you registered.
Only for business use. The property has to be held for your commercial activities when you register, and the usual input tax credit limits still apply. For example, there are special limits for meals and entertainment and for passenger vehicles.
Equipment and inventory: the basic tax content
When you register, the CRA treats you as having bought each business asset you still hold at that moment, and as having paid tax equal to its basic tax content. You claim an input tax credit for that amount.
Basic tax content starts with the GST/HST you paid on the item. It's reduced if the item has lost value since you bought it, and by any tax you got back another way, such as a rebate.
- Computer bought March 2022
- $2,200
- GST paid on it (A)
- $110
- Tax recovered another way (B)
- $0
- Fair market value at registration, Jan 1, 2024
- $1,100
- Value factor (C)$1,100 ÷ $2,200
- × 0.5
- Basic tax content: input tax credit($110 − $0) × 0.5
- $55
Keep the paper trail. You need documents to back the claim: the original receipt showing the GST/HST paid, and a note of how you worked out the item's value when you registered.
Prepaid rent and services: split at your registration date
If a payment covers time on both sides of your registration date, only the part after the date counts. The CRA uses a rent example:
Office rent for January 1 to March 31, 2025 was prepaid, and the business registered on March 1, 2025. It can claim an input tax credit for the GST/HST on March's rent only, not on January's or February's.
Choose your registration date with this in mind
If you register voluntarily while still a small supplier, your effective date is usually the day you apply. It can generally be up to 30 days earlier, which can bring a recent purchase into your registered period.
An earlier date works both ways. From your effective date you have to charge GST/HST on your sales and file returns. You also have to stay registered for at least a year before you can cancel, unless you stop your business activities.
If you were required to register because you went over $30,000, your effective date is set by the small supplier rules instead. See what to do if you went over $30,000 without charging and the $30,000 rule explained.
When and where to claim it
You can include these credits in your first GST/HST return for the reporting period that ends after you register, on line 106 with your other input tax credits.
If you miss them, you can claim them on a later return within the time limit. For most registrants, that's the due date of the return for the last reporting period ending within four years after the period when you could first have claimed them.
Tracking it
Record the GST/HST shown on every business receipt from day one, even before you register. Then, when you register, you already have the list of assets and prepaid costs to check.
Log the GST/HST on every receipt, registered or not
The Canada Self-Employed Income, Expense & GST/HST Tracker is a spreadsheet for Excel and Google Sheets. The Expenses tab records the GST/HST paid on each receipt with its T2125 line, and estimates your input tax credits from it. One-time price, $19 CAD, instant download.
Get the tracker: $19 CAD What's insideNot sure what a receipt has to show? See what the CRA expects you to keep.
FAQ
Can I claim GST/HST I paid before I registered?
Partly. If you were a small supplier just before registering, you can claim input tax credits for property you still hold for your business, based on its basic tax content. You can also claim GST/HST prepaid on services or rent for the period after you register. You can't claim tax on services supplied to you, or rent for periods, before your registration date.
Can I claim the GST/HST on a laptop I bought last year?
If you still hold it for your business when you register, yes, up to its basic tax content. That's the GST/HST you paid, reduced if the laptop is now worth less than you paid. In the CRA's example, a $2,200 computer with $110 GST, worth $1,100 at registration, gives a $55 credit.
What is basic tax content?
It's the GST/HST you paid on a property, minus any of that tax you recovered by rebate or similar, scaled down if the property's fair market value has fallen below what you paid for it.
I prepaid three months of rent before registering. What can I claim?
Only the GST/HST on the part of the rent that covers the period after your registration date. In the CRA's example, rent prepaid for January to March with a March 1 registration date gives a credit for March only.
How far back can I set my registration date?
If you register voluntarily as a small supplier, usually up to 30 days before the day you apply. If you were required to register because you went over $30,000, your effective date is set by the small supplier rules, and going back more than 30 days needs a written request to the CRA.
Where do I claim these credits?
On line 106 of your GST/HST return, starting with the first reporting period that ends after you register. You can also claim them on a later return within the time limit, which for most registrants runs about four years from the end of the period when you could first have claimed them.