Special rules for specific GST credit claims
Special rules for claiming GST credits apply to a number of specific types of purchases, including:
If you're setting up a company, the company can claim GST credits for the GST included in the price of some purchases you make before the company comes into existence, such as set-up fees, business registration, trading stock and business premises.
To claim GST credits for these pre-establishment costs the following seven criteria must apply:
- the purchase must be for the purpose of bringing the company into existence or carrying on a business after it comes into existence
- the company must come into existence and be registered for GST no more than six months after the purchase
- you must become a member, officer or employee of the company
- the company must have fully reimbursed you for the cost of the purchase
- the purchase must not be used to make input-taxed sales or for private purposes
- the company must not be entitled to a GST credit for the purchase, if it subsequently acquires the thing from you
- you must not be entitled to claim a GST credit for the purchase.
You can claim a GST credit for any second-hand goods you buy from unregistered suppliers for the purposes of sale or exchange but not for manufacture (even though GST is not included in the price of the goods), provided you meet certain conditions.
Other special rules
There are a number of other special rules about claiming GST credits. They include:
- periodic or progressive supplies, such as lease payments or service contracts
- purchases made with corporate credit cards
- purchases of land under standard land contracts
- supplies of gas and electricity by public utility providers
- lay-by purchases.
Special GST rules apply when setting up a company and when purchasing second-hand goods, as well as in some other circumstances.