GST Input Tax: Recovering expenses

Key requirements

An expense recovered in your own capacity is a reimbursement, and qualifying input tax can be claimed where recovery constitutes a taxable supply. As an agent making a true disbursement for another person, you do not receive that supply and cannot claim its input tax; recovery itself is not a supply. Assess the contractual obligation and recipient instead of assuming that paying the bill creates entitlement. A separate administration mark-up is assessed as its own service. Transport costs incurred by an auditor to perform its work are principal expenses and their reimbursement follows the taxable audit supply. Within one company, departmental billing is disregarded. Keep purchase evidence and the recovery calculation linked so that principal and agent do not both claim the same tax.