Ontario HST — working note
Twelve HST rules hidden in ordinary receipts
Most receipts are boring until one of these rules applies. None of them is exotic; all of them are routinely missed when a document is read quickly at month end.
01
Supplier number threshold
A purchase over $150 needs the supplier's HST number on the document for a clean ITC. Under $150 the number may be absent — but the HST charged still has to be visible.
02
The 50% meals limit
Food, beverages and entertainment are limited to 50% of the ITC. The other half is a permanent cost — book it that way instead of letting it disappear.
03
Alcohol is not exempt from the limit
Wine at a client dinner is a beverage, so the same 50% limit applies. The common mistake is treating it as fully creditable.
04
A voluntary tip is not a supply
A separately stated, voluntary gratuity is not consideration — there is no ITC to claim and no HST to remit on it.
05
A mandatory service charge is price
An auto-gratuity on a large table is part of the taxable price, not a tip. On the same bill, one line is a tip and another is HST-able.
06
Exchange rate on the invoice date
A USD receipt converts at the rate on the invoice date (or CRA's published rate), not today's. Using the wrong date misstates the ITC quietly.
07
Imported digital services
Foreign software that charges no HST may require self-assessment. It is the most common silent gap in a Canadian firm's books.
08
Two groceries, two treatments
Basic groceries are zero-rated; restaurant food is taxable. Both arrive as a receipt for food, which is why the merchant and the line matter.
09
A card statement is not an invoice
A processor's statement does not support the ITC on the underlying purchase. The merchant's document with the tax shown is still required.
10
Electronic copies are defensible
Legible electronic records satisfy the record-keeping requirement when complete and retained six years. Paperless is not the risk people fear.
11
Illegible means flagged, not guessed
Assessment is on records quality. A flagged row is a defensible position; a guessed row is not. This is the rule the pipeline is built around.
12
Line-level coding, not document-level
A single receipt can carry a fully creditable line, a 50%-limited line and an exempt line. Coding at document level loses all three distinctions.
These notes are information, not tax advice, and rules apply case by case. Verify against current CRA guidance for your situation.