If you make purchases relating to floating a company you generally cannot claim a GST credit for the GST you pay on those purchases because they are related to making an input taxed financial supply of securities.
However, if you do not exceed the financial acquisitions threshold you may still be able to claim a GST credit for the GST you pay on these purchases, even though you use them to make financial supplies.
If you exceed the financial acquisitions threshold you cannot claim GST credits on purchases you use to make financial supplies, but you may be able to claim a reduced GST credit on those purchases if they are reduced credit acquisitions.
Financial acquisitions threshold
A financial acquisition is a purchase that you use for making a financial supply (other than a financial supply which is a borrowing).
The financial acquisitions threshold exists to allow entities that make a relatively small amount of financial supplies, as compared to their taxable supplies or GST-free supplies, to claim full input tax credits relating to those financial acquisitions.
If you do not exceed the financial acquisitions threshold, you will be entitled to full input tax credits for your acquisitions relating to financial supplies.
There are two tests you can use to see if you exceed the financial acquisitions threshold. You may exceed the threshold under either test. Both tests are based on financial acquisitions you make.
See also:
- Charging GST and claiming GST credits – Financial acquisitions threshold for tests you can use to see if you exceed the financial acquisitions threshold
- GSTR 2003/9 Goods and services tax: financial acquisitions threshold
- Financial services – questions and answers (Financial acquisitions threshold)