How to Add Input Credits for Canada and the EU
How to add Input Tax Credits for Canada (ITCs) and the EU (Input VAT) in Kintsugi so they are automatically applied against collected tax to lower your payment.Updated 5 days ago
When your business pays sales tax or VAT on expenses, such as inventory purchases, shipping costs, or professional services, you are often entitled to a credit. In Canada, these are Input Tax Credits (ITCs); in the EU, they are known as Input VAT.
Instead of waiting for a refund check from the government, Kintsugi allows you to "input" these amounts into our platform to reduce liability. We then automatically apply them against the taxes you’ve collected from your customers, reducing your final payment.
EU and UK: Credits can also be created for you. If you upload your purchases, Kintsugi works out how much of the VAT on them you can recover and nets it against the VAT you owe for that period. Anything left over is added as an Input VAT Credit on the same screen described below, so you do not need to enter it by hand. Manual entry still works, and it remains the only route for Canadian Input Tax Credits. See How to Upload Purchase Transactions in Kintsugi.
⚠️ Do not enter the same reclaim twice. If Kintsugi is already calculating input VAT from your uploaded purchases, do not also add that amount here as a manual credit. Doing both would claim the same VAT back twice.
Here’s how to Add Input Credits on the Kintsugi App
Log in to the Kintsugi App.
Navigate to the Registrations tab.
Look for the jurisdiction where you want to add credits and click the kebab menu icon (three vertical dots), and you will see two options: Credit and Deregister. Click Credit.
Click the ‘New’ button that you will see in the side panel.
Fill the form. Click the down arrow button to select the country and fill in the Credit Amount. Please note that credits have expiration dates. Expiration date is optional, but it is set to 3 years by default. Click the Save button to complete the process.
Once the credit is added successfully, it will appear as below.
Note: When a filing is created, our system automatically scans the registration for any available credits and applies them for you. No manual action is required, just ensure the credit is added to the account, and we’ll handle the rest.
How Credits Are Applied Alongside Uploaded Purchases
For EU and UK registrations where you upload purchases, Kintsugi works through each filing period in this order:
The period's recoverable input VAT from your uploaded purchases is netted against the VAT you owe
Any credits already on the registration, including ones you added manually, are applied to what is still due
If the period's recoverable input VAT is greater than the VAT you owe, the filing stops at zero and the surplus is added as a new credit
A filing amount never drops below zero.
Need Help?
For further concerns, we're always here to help. If you can't find the answer you're looking for, just reach out to us using the chat in the bottom right corner of your screen.