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Recoverable expense and GST

Newbie

Views 758

Replies 3

My client issues tax invoices to their clients for services performed, as well as charging for any recoverable expenses.  Where the recoverable expense has been purchased overseas and doesn't contain GST are they obliged to:

  • Charge GST on the recoverable expense (eg cost to them was $1,000 so they invoice $1,100 inc GST)
  • Don't charge GST and charge $1,000 as input taxed item
  • Don't charge GST and charge $1,000 as GST-free item

Many thanks

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Community Support

Replies 2

Hi @Proactive 

 

The first dot point is correct. When your client on-charges any recoverable expenses, those expenses do not retain the GST-free (or input taxed) classification.  

The recoverable expenses form part of your client’s taxable supply and as such the GST classification will change to fall under the normal rules for taxable supplies.

3 REPLIES 3

Most helpful response

Community Support

Replies 2

Hi @Proactive 

 

The first dot point is correct. When your client on-charges any recoverable expenses, those expenses do not retain the GST-free (or input taxed) classification.  

The recoverable expenses form part of your client’s taxable supply and as such the GST classification will change to fall under the normal rules for taxable supplies.

Newbie

Replies 1

Thanks @RoB7 

 

Here's one for you - what about the duties and taxes paid in Australia?  My client wants to oncharge them but I don't believe GST should be added to this should it?

 

Thanks

Community Support

Replies 0

Hi @Proactive,

 

Thanks for your patience. The on-charging of a tax, fee or charge is taxable. The on-charged fee becomes an ordinary cost of the supplier to the person that acquires the supply. The price will be GST-inclusive if the supply is a taxable supply.

 

Let us know if you have any further questions,

JasonT