GST and insurance
If you're registered for GST, you can claim a full or partial credit for the GST included in an insurance policy premium covering a business asset.
Tell your insurer you're registered for GST as this will affect your GST liability on any settlements.
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Reporting GST in your activity statement
If you're eligible for a GST credit on an insurance policy you can claim it through your activity statement. You can only claim a GST credit for the part of the insurance relating to your business.
Generally, GST is charged on insurance policies other than:
- life insurance (these are input taxed)
- health insurance policies (these are GST-free).
You can't claim a GST credit for any part of your insurance that relates to:
- input-taxed sales you make
- things you use for private or domestic purposes.
In most circumstances you must hold a valid tax invoice to claim back any GST you've paid.
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If GST is included in an insurance premium, include the price of the insurance premium less the amount of stamp duty at G11 (non-capital purchases).
If you use the:
- accounts method, report one-eleventh of the amount of the premium (less any stamp duty) at 1B (GST on purchases)
- calculation worksheet method, use the worksheet to work out how much to report at 1B (GST on purchases).
Compulsory motor vehicle third party insurance
You can't claim a GST credit on compulsory third party motor vehicle insurance premiums where the cover started before 1 July 2003.
Report at G1 (total sales) the amount of the settlement you must pay GST on.
This rule does not apply if you receive a settlement amount under a compulsory third-party insurance scheme.
If you are using the:
- accounts method, report the amount of GST you must pay on the settlement amount at 1A (GST on sales)
- calculation worksheet method, use the worksheet to calculate how much GST is to be reported at 1A (GST on sales).
Do not report amounts for any of the following:
- money, digital currency or goods you receive from your insurer to settle your claim under an insurance policy – provided you told your insurer the amount of GST you can claim on the policy premium, before or when you made a claim
- settlement of your claim against another party where you are not the insured party and the insurer pays the settlement amount directly to you
- settlement of your claim against another party, where the insured receives the amount as settlement from their insurer and then provides it to you.
Payment of an excess
You can't claim GST credits on any excess that you pay to your insurer.
If you pay an excess to someone other than your insurer you can claim a credit on any GST paid if:
- the party you pay is not acting as an agent for your insurer
- you receive a tax invoice.
Report the amount of the excess at G11 (non-capital purchases) or at G10 (capital purchases).
If you're using the:
- accounts method, report any GST credits you can claim at 1B (GST on purchases)
- calculation worksheet method, use the worksheet to calculate the amount to report at 1B (GST on purchases).
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