GST/HST rebate for partners
If you are an individual who is a member of a Partnership, you may be able to get a rebate for the GST/HST you paid on certain expenses.
You may qualify for this rebate if:
- the partnership is a GST/HST registrant; and
- you personally paid GST/HST on expenses that:
- you did not incur on the account of the partnership; and
- you deducted from your share of the partnership income on your income tax return.
However, special rules apply if your partnership paid you an allowance for those expenses.
Examples of expenses subject to the GST/HST are vehicle costs and certain business-use-of-home expenses. The rebate may also apply to the GST/HST you paid on motor vehicles, musical instruments, and aircraft, for which you deducted Capital cost allowance (CCA).
The eligible part of CCA is the part that you deduct on your income tax return in the fiscal period that relates specifically to a motor vehicle, musical instrument, or aircraft on which you paid GST/HST. It would also be eligible for the rebate, to the extent that the partnership used the property to make taxable supplies.
You can also get a GST/HST rebate calculated on the CCA you claimed on certain types of property. For example, you can generally claim the rebate based on the CCA you deducted for a vehicle you bought to earn partnership income if you paid GST/HST when you bought it.
If you deduct CCA on more than one property of the same class, separate the part of the CCA of the property that qualifies for the rebate from the CCA for the other property. If any part of the rebate relates to the CCA deduction for a motor vehicle, a musical instrument, or an aircraft, you have to reduce the Undepreciated capital cost (UCC) of that property by the amount that is part of the rebate.
To claim your GST/HST rebate for partners, complete Form GST370, Employee and Partner GST/HST Rebate Application. You have to include this rebate in your income for the fiscal period in which you receive it.
If in 2019 you receive a GST/HST rebate for the 2018 fiscal period, you have to include the amount of the rebate on your income tax and benefit return for 2019:
- Report, as an expense, at Line 9974 – GST/HST rebate for partners received in the year the amount for partners that relates to eligible expenses other than CCA; and
- In column 2 of Area A on page 5 of your 2019 form T2125, Statement of Business or Professional Activities, reduce the UCC for the beginning of 2019 by the part of the rebate that relates to the eligible CCA.
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