Can I claim an ITC for GST/HST charged by a foreign software platform?

Arsen Accounting Services · Question 150 · Sources checked October 29, 2026

Browse gst/hst and business transactions →

Not always. A foreign supplier may be registered under Canada's simplified digital-economy regime rather than the normal GST/HST system. Tax charged under the simplified regime has special consequences for a Canadian business customer.

Identify the supplier's registration regime

CRA says a business registered under the normal system should provide evidence of its registration to a supplier in the simplified registry so that tax is not charged under those rules. If the business is charged that tax, it cannot simply claim an input tax credit or rebate for it.

Normal-regime invoices are reviewed under the usual ITC conditions. The word “HST” on a software receipt is therefore not enough to determine the result.

Official guidance: [1], [2].

Fix the account information early

For example, an owner subscribes using a personal profile before adding the business's GST/HST number. Monthly invoices may continue charging simplified-regime tax. Update the supplier account and ask the supplier about correcting amounts charged in error rather than automatically entering them as ITCs.

Keep the evidence

• Supplier name and tax-registration information.
• Subscription invoices and payment records.
• Proof of the business's registration supplied to the platform.
• Correspondence about refunds or corrected invoices.

Ask your bookkeeper to flag foreign digital suppliers for review instead of applying a universal tax code. Recheck when billing entities change or the subscription moves to a new account. Where tax cannot be recovered through an ITC, the income-tax treatment of the business cost still requires its own analysis; the two questions should not be merged.