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.
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.
- GST Ruling: Division 156 - supplies and acquisitions made on a progressive or periodic basis
- GST Ruling: Corporate card statements - entitlement to an input tax credit without a tax invoice
- GST Ruling: Attributing GST payable or an input tax credit arising from a sale of land under a standard land contract
- GST Ruling: Attributing GST payable on supplies of gas and electricity made by public utility providers
- GST Ruling: Attributing GST payable and input tax credits for supplies and acquisitions under lay-by sale agreements