(Disponible uniquement en anglais)
There have been many recent cases regarding the information requirements for claiming input tax credits: CFI Funding Trust v. The Queen, 2022 TCC 60, Axamit Versa Inc. v. The King, 2022 TCC 163, Fiera Foods Company v. The King, 2023 TCC 140.
Specifically, subsection 169(4) only provides that the registrant must have obtained the prescribed information in a form that will allow the ITCs to be determined and not how that information is obtained.
We are still seeing CRA auditors requiring invoices and restricting the form of information that they require contrary to the case law. Recently in Excise and GST/HST News No. 118 (January 2025), the CRA suggested that registrants need specific information on certain documentation.
This is inconsistent with the CRA's answer last year that “there is no provision in the Excise Tax or in the related regulations which requires all requisite information in support of an ITC claim to be presented in a specific kind of document or format or that all required information be contained within a single document.”
Questions
- Will the CRA be correcting the GST/HST News No. 118?
- What steps are being taken by the CRA to educate its auditors about the information requirements to avoid unnecessary disallowance of input tax credits?
CRA Comments
- The GST/HST News No. 118 article was only meant to highlight the changes to the thresholds for the specific information required to support an ITC claim by a purchaser. The article also states that the supplier must provide specific information on invoices, receipts, contracts, or other documentation (that is, in writing) to purchasers intending to claim an ITC, which is consistent with subsection 223(2). The CRA maintains that there is no provision in the ETA or related regulations requiring all requisite information, in support of an ITC claim, to be presented in a specific kind of document or format or that all required information be contained in a single document. This means that registrants can present the necessary information in various ways. The information itself, as per subsection 169(4) of the ETA, must be available in a form that permits the ITC to be calculated.
At this time, the CRA has no plans to revise GST/HST News No. 118 as it does not contradict prior CRA guidance or case law. - The Audit Examination Manual was updated in September 2024 to reflect the decisions rendered in CFI Funding Trust v. The Queen and Fiera Foods Company v. The King.
(From chapter 31.4.0 Supporting documentation)
The legislation does NOT require the prescribed information to be contained in a single document. Depending on the industry practices or specific business or company practices the information may come from a number of sources. An example would be a registrant who has a written agreement in place which describes the supplies between the parties including the business number, a statement of account, and a cancelled cheque. As long as the three items together include ALL of the prescribed information and was available at the time the ITC claim was made, the ITC claimed would be sufficiently supported.
There is a significant volume of jurisprudence on this topic (see the annotations section 169). In McDavid v The Queen 2014 TCC 112 [Headnote] at the beginning of its analysis of the issues related to documentation, the court pointed out "the required information does not have to be in the form of an invoice nor does it have to be contained in a single document", as well as "Indeed, the definition of supporting
documentation is an inclusive and broad one.".
Fiera Foods Company v The King 2023 TCC 140 [Headnote] referenced CFI Funding Trust v The Queen 2022 TCC 60 [Headnote] which clarified that subsection 169(4) and the Input Tax Credit (GST/HST) Information Regulations (SOR/91-45) do not set out a general requirement for the supporting documentation to be issued or signed by the supplier. Thus, a registrant is not required to obtain and retain specific documentation issued or signed by the supplier to support its ITC claims.
In addition, the Tax Court of Canada in CFI Funding Trust indicated that “subsection 169(4) simply provides that the registrant must have obtained the prescribed information in a form that will allow the ITCs to be determined. How that information is obtained does not matter. It may be obtained through oral or electronic communication.” Thus, information stored on a registrant's computer server qualifies as supporting documentation, e.g., a business that obtains a supplier's GST registration number and other required information, and stores it electronically anywhere in its records before filing its ITC claim, has sufficient supporting documentation.