Is Gst Paid An Expense
GST and employee reimbursementsAs an employer you're entitled to a GST credit when you reimburse an employee for a taxable expense that is directly related to your business activities. This includes paying an expense payment benefit.You can claim the credit in your activity statement in the normal way once your employee gives you a tax invoice or receipt for the expense.You and your employee cannot both claim a GST credit for the same expense.Find out about:.ReimbursementsYou make a reimbursement when you pay your employee the amount, or part of the amount, of a particular work-related purchase they make. Example: Reimbursement of a work-related expenseAlexandra employs Petra in her advertising agency.
Petra purchases craft materials for a client presentation that she is responsible for. The materials cost Petra $90, including GST.
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Gst Transactions
It is generally accepted that the GST collected and the GST paid should not be treated as part of revenue and expenditure of the church but rather as an asset.
Gst Presentation In Financial Statement
As the expense is for Petra's work in the agency, and Alexandra's policy is to reimburse these expenses if tax invoices are presented, when Petra makes a claim for her expense with the receipts attached Alexandra pays her $90.Alexandra is entitled to a GST credit on this reimbursement.Example: Reimbursement of expense payment benefitsKarim's children attend a non-government school. Karim pays their yearly school fees in advance. He also pays for school uniforms. Karim's employer, Maria, agrees to reimburse him these expenses after he gives her all of the relevant receipts and invoices. Maria makes separate payments for the school fees (education is GST-free) and uniforms (taxable).
Both payments to Karim are expense payment benefits.Maria is entitled to a GST credit on the reimbursement for Karim's purchase of taxable school uniforms. However, even though Maria reimbursed the school fees, she cannot claim a GST credit because the cost of education is GST-free.Maria may have a fringe benefits tax (FBT) liability for the reimbursed expenses. Example: AllowancesMiyuki employs Juan in her Melbourne software firm. She asks Juan to attend a conference in Sydney. Miyuki pays Juan a travel allowance of $450. Juan is not expected to repay any of the allowance he does not spend, but he will not be entitled to an additional payment if his expenses exceeds this amount.Miyuki has paid Juan an allowance.
She is not entitled to any GST credits for Juan's expenses, regardless of how much Juan spends.Miyuki may have pay as you go (PAYG) withholding obligations when she pays an allowance. End of exampleSee also:.Payments for notional expensesA payment made to an employee based on a notional (rather than an actual) expense, such as a cents-per-kilometre payment to cover work-related use of an employee's private car, is an allowance, not a reimbursement. As it is not a reimbursement you are not entitled to a GST credit for this type of payment. Our commitment to youWe are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice. Copyright notice© Australian Taxation Office for the Commonwealth of AustraliaYou are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).