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yanrucao23(Newbie)Newbie
30 Apr 2026

Hi ATO Community

We engage a contractor (ABN registered and GST registered) who has been working with us for several years. The contractor invoices us for both labour and expenses (e.g. travel mileage, LAFHA, taxi, fuel, hire car and workwear).

For labour invoices, GST is separately disclosed. However, for the expense invoices, no GST amount is separately disclosed.

We requested a revised invoice with GST clearly disclosed; however, the contractor has declined to reissue the invoice and advised that their format is not intended to be a GST invoice. They also confirmed that they don’t include the tax invoice for expenses in their tax return or records, and they don’t pay or claim GST on them.


Our questions

  1. Can we claim input tax credits on these components (e.g. LAFHA and travel mileage)? For LAFHA, the invoice states “rate includes GST as per agreement”. I don’t think we can claim GST on travel mileage — could you please confirm?
  2. Where valid tax invoices/receipts are provided from third-party suppliers (e.g. taxi, car rental, fuel), can we rely on those documents to support GST claims, even though the contractor (not our company) incurred the expense?
  3. If the contractor changes the document title from “Tax Invoice” to “Allowances Claim” or “Reimbursement Claim,” would this be acceptable for us to claim GST credits? If so, would these amounts still need to be included in TPAR?

Thank you in advance for your advice.

38 views
3 replies
38 views
3 replies

All replies

JayATO(Community Support)Community Support
30 Apr 2026

Hi @yanrucao23,


You can only claim GST credits where the contractor is making a taxable supply to you and GST is actually payable. 


In your case, the contractor has confirmed they don’t treat the expense components as taxable supplies and don’t remit GST on them, so no GST credits are available on those amounts, regardless of how they’re described.


Living-away-from-home allowance (LAFHA) and travel mileage

Mileage amounts calculated on a cents‑per‑kilometre basis don’t include GST, so there’s nothing to claim. 


LAFHA‑type amounts aren’t automatically taxable supplies either. Without a taxable supply and GST being charged, GST credits aren’t available. 


Statements such as ‘rate includes GST’ don’t change this on their own.


Third‑party receipts

You can’t rely on third‑party tax invoices (for example taxi, fuel or car hire receipts) issued to the contractor. The supply was made to the contractor, not to you, so the GST credit belongs to them, not your business.


Changing the document title doesn’t affect the GST outcome. What matters is the substance of the arrangement, not the label.


Taxable payments annual report (TPAR)

Amounts paid to contractors are reportable in TPAR where they form part of the consideration for services. Genuine reimbursements of out‑of‑pocket expenses may be excluded, but allowances or amounts that form part of the contractor’s remuneration are generally included. The distinction depends on the facts of the arrangement.


You’ll need to determine whether each payment is a genuine reimbursement or part of the contractor’s service fee. A GST‑registered contractor is only required to issue a tax invoice where they’re making a taxable supply.


YellowPotato(Taxicorn)Taxicorn
1 May 2026

Best to see a tax agent or ask ATO's technical assistance or private ruling


  1. I think you would be able to claim GST because I think that would count as taxable sale for the contractor regardless what they named it. I don't see how they could classify those sales as GST-free sales or input-taxed sales. I think it would be easier to think of it they charged you extra fees and the names 'travel mileage' etc as for why they charge you that amount. (I'm sure there's a more relevant ruling from ATO GSTD 2000/10 but I think it would be similar to when landlords registered for GST on-charge expenses to tenants).
  2. Fairly certain you don't claim the GST on expenses incurred by contractor. The expense is for them. The GST you claim would be the GST paid in the contractor fees
  3. Not sure why they are changing the name, as you do lose the first detail of a tax invoice "Document is intended to be a tax invoice." I'm fairly certain 'reimbursement' and 'allowance' is in regards to employee, for contractor, it would be more 'sales' to them. So I think it would be more sales for them and add it to the TPAR. Best to ask a professional or ATO.

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