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Canada Restaurant ITC Documentation Checklist (2026): Stop Losing Recoverable GST/HST

A practical 2026 checklist for Canadian restaurants and cafes to protect Input Tax Credit claims with cleaner records, stronger invoice capture, and weekly controls.

Published Feb 14, 2026
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Many operators think ITC leakage is small. Then one review cycle shows how much recoverable tax was never claimed properly.

In 2026, that is margin you cannot afford to lose.

Quick Take

  • Statistics Canada (December 2025) reports food purchased from restaurants +8.5% YoY.
  • CRA defines ITC as tax recovery for purchases used in commercial activities.
  • CRA says invoices and business records support ITC claims.
  • If you are not registered, you generally cannot claim ITCs.

This is not about complex tax theory. It is documentation discipline.

The Core ITC Formula

Recoverable ITC = GST/HST paid x commercial-use percentage

If use is partly personal or exempt-side activity, only the commercial portion is claimable.

Worked Example

Assumptions:

  • Packaging purchase: CAD 1,200 + HST CAD 156
  • Commercial-use share: 100%
Recoverable ITC = 156 x 1.00 = CAD 156

Another expense:

  • Device and connectivity bundle, tax paid: CAD 84
  • Commercial-use share: 70%
Recoverable ITC = 84 x 0.70 = CAD 58.80

Small misses across many invoices add up fast.

What CRA Emphasizes (Operationally)

From RC4022 guidance:

  • ITCs are claimed to the extent purchases are for commercial activities
  • supplier invoices and records support your claim
  • specific information requirements matter for ITC documentation

So the risk is usually not “wrong formula,” but weak evidence trail.

20-Minute Weekly ITC Checklist

  • Export this week’s purchase ledger with tax fields
  • Verify supplier invoice completeness for ITC support
  • Tag commercial-use percentage on mixed-use expenses
  • Hold unclear entries in a review bucket (do not auto-claim)
  • Reconcile provisional ITC total against bookkeeping
  • Assign one owner for missing-document follow-up

Community Signal

In Canadian small-business threads, first-year operators repeatedly ask about registration timing, records, and tax review fear. That pain usually comes from process gaps, not effort gaps.

Common Mistakes

  1. Claiming ITCs without clean invoice support
  2. Treating mixed-use expenses as 100% commercial by default
  3. Waiting until filing week to classify expenses
  4. Not separating “ready-to-claim” vs “hold-for-review” entries

KitchenCost helps you keep purchase-level cost and contribution data structured, so tax documentation gaps do not hide inside operational reporting.

Sources (checked on 2026-02-14)

Frequently Asked Questions

What is an ITC in plain language?

An Input Tax Credit lets GST/HST registrants recover eligible GST/HST paid on purchases used in commercial activities.

Why do small restaurants miss ITCs?

Usually because invoice data is incomplete, records are scattered, or commercial-use evidence is weak at review time.

Can I claim ITCs if I am not registered?

CRA guidance says if you choose not to register, you do not charge GST/HST and generally cannot claim ITCs.

What should I check weekly?

Reconcile tax paid on purchases, validate invoice fields, and flag questionable entries before month-end.

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