When you can claim GST back
You can claim GST back when:
- you’ve purchased goods or services for your business (these are called input tax credits)
- a customer leaves you with a bad debt
GST tax credits for business expenses
When you buy something for your business, you’re usually charged GST. If you’re registered for GST, you can claim that back. You do this by claiming a GST tax credit when lodging your business activity statement (BAS). The ATO will balance those credits against the GST you owe when working out your refund or bill (learn more in working out your GST).
When expenses are split between business and home
If you bought something for both your business and for private use, you can claim a GST credit for the business portion.
When you’re not collecting any GST
You can claim back GST on supplies even if the end product or service that you sell is GST free.
Claiming back GST on a bad debt
If you account for GST on an accrual basis, you can sometimes get caught out by a bad debt. For example you might raise an invoice and pay GST on the expected income then find your customer doesn’t pay you.
Don’t worry, you may be able to claim back the GST from the ATO on your next return. If the customer pays later, you will repay the GST then.
Disclaimer: Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content.
Guide to GST & BAS
Making a start with GST and BAS? Don’t worry. It’s a little extra admin, but follow our guide to get on top of it.
- What is GST?
You’ve probably heard about GST – it stands for goods and services tax and is added to most prices in Australia.
- Registering for GST
Find out if your business needs to register for GST. If so, learn how to do it and find out what happens next.
- Calculating GST and issuing tax invoices
If you’re a GST-registered business you must add GST to your prices. You also need to issue GST invoices. Find out how.
- Claiming back GST (and input tax credits)
GST-registered businesses can claim back the GST they pay on business expenses. Let’s learn how to claim it.
- Working out your GST refund or payment
Working out GST is simple maths. Keeping track of all your transactions is the tricky part. Let’s learn the process.
- What is BAS and how to lodge it
GST-registered businesses declare how much they’ve collected and paid by completing a business activity statement (BAS).
- Tools and guides for your business
Now you know the ins and outs of GST and BAS, but it can be tough to manage it all. Xero’s got the resources to help.
Download the guide to GST
Get your small business tax sorted. Fill in your details to get our full GST guide as a PDF.