Associated persons file separate GST/HST returns, but they must combine their total taxable sales of goods and services in certain situations. A Ltd. sells 100 percent fully taxable supplies, and B Ltd. sells 100 percent zero-rated supplies. In which of the following situations would the associated small businesses A Ltd. and B Ltd. NOT need to combine their taxable sales?

Question

Quizplus · Accepted Answer

Associated businesses must combine their taxable sales to determine eligibility for certain tax benefits or obligations, such as the small supplier's exemption or specific accounting methods. However, when claiming input tax credits (ITCs) for purchases, such as a building for A Ltd., each entity can claim ITCs based on their own purchases and use, without needing to combine their taxable sales with associated entities.

Associated Persons File Separate GST/HST Returns, but They Must Combine