After you claim
If your claim is accepted as filed, you will be notified on your notice of assessment or reassessment.
On this page
If a recapture of your credit is required
An amount of the credit you have already received may have to be recaptured in a tax year for clean technology property you acquired in the year or in any of the preceding 10 calendar years, if the clean technology property was:
Converted to a non-clean technology use
Exported from Canada
Disposed of
The recapture amount is calculated based on the proportion of the value of the property that has been utilized prior to its conversion to a non-clean technology use, its export, or its disposition.
This recapture amount will not exceed the Clean Technology ITC amount associated with the particular property.
Taxpayers and partnerships must report recapture events to the CRA in prescribed form and manner by the taxpayer’s filing due-date for the year in which the recapture event occurs or, in the case of a partnership, on or before the day when a return is required by section 229 of the Income Tax Regulations to be filed in respect of the fiscal period of the partnership in which the recapture event occurs.
Avoiding recapture for waste biomass electricity generation equipment or waste biomass heat generation equipment
Waste biomass electricity generation equipment or waste biomass heat generation equipment that is part of a system can be considered to be operating in the required manner during a deficiency, failing, or shutdown of the system. We consider this to be the case if these occurrences are beyond the control of the qualifying taxpayer. The taxpayer must make all reasonable efforts to fix the issue causing the deficiency, failing, or shutdown. The taxpayer making these efforts prevents the property from being in a non-clean technology use situation and avoids recapture.
The system may include another person’s or partnership’s property if:
- The property would reasonably be considered to be part of the system if the taxpayer owned the property
- The property uses electrical energy or heat energy from the system
- The operation of the property is necessary for the system to avoid operation in a manner that is a non-clean technology use
- At the time the system first became operational, the deficiency, failing, or shutdown in the operation of the property was reasonably unforeseeable within five calendar years
Deferring recapture on non-arm’s length transfers between taxable Canadian corporations
A taxable Canadian corporation may defer the recapture of a Clean Technology ITC if it transfers clean technology property to a related taxable Canadian corporation, and the transferee (the party receiving the property) continues to use the property in a clean technology use. This deferral is not available to partnerships and real estate investment trusts.
The transferor (the party transferring the property) must report the transfer to the CRA no later than the transferor’s filing due date for the tax year in which the transfer occurred. Until the prescribed form to report the non-arm’s length transfer between taxable Canadian corporations is available, include the following information in a letter with your return:
- Capital cost of the property
- Capital cost allowance class
- Clean technology property asset code and description
- Date the clean technology property became available for use
- Date of the transfer
- Name and business number of the non-arm’s length transferee
- Amount of the Clean Technology ITC received by the non-arm’s length transferor
Generally, the transferee is considered to have claimed the credits the transferor received for the property. This ensures that the transferee is subject to recapture if it changes the use of the property to a non-clean technology use, disposes of the property, or exports the property.
If your claim needs a review
Some claims may be selected for further review.
If your claim requires a review, it is because the CRA requires further information about the project(s) or expenditures being claimed.
In some cases, the CRA may request an on-site or virtual meeting to ask further questions or clarify details. You may be asked to provide supporting documents to verify expenses and confirm if you have met the various requirements, including the labour requirements.
After the CRA finishes reviewing the documents provided, the CRA will provide you with a written summary of the review findings. If the CRA finds that no changes need to be made to the claim, then no further action is required and the review will be closed.
If the CRA determines that changes need to be made to the claim, you will have 30 days to respond to the written summary of the review findings before the review changes are confirmed and your return is assessed or reassessed.
If you disagree with our decision
If you disagree with the CRA's final decision, you still have some recourse options.
For information about filing an objection, refer to: Resolving disputes
For information about the objection and appeals processes, refer to: Objections and appeal rights under the Income Tax Act