Input Tax Credit Percentage
CLAIMS GUIDE
Input Tax Credit Percentage | Master Builders Insurance Brokers
What is Input Tax Credit?
An Input Tax Credit (ITC) (also known as a GST Credit) is a claim for a credit for any Good and Services Tax (GST) included in the price your business pays for goods and services.
How do I know what my ITC percentage is?
In most cases, clients who are registered for GST claim 100% as their ITC percentage.
However, if you purchase goods and/or services for both personal and business use, your ITC will be less than 100%.
Remember that you can only claim the ITC percentage for the portion of your purchase that relates to your business use.
Your accountant or bookkeeper is the best person to contact to ask what you currently claim as your ITC percentage.
Since GST is charged at 10% of the purchase price. Shouldn’t my ITC percentage be 10%?
No. The ITC considers the portion of your purchases that are for business use. It is not a tax on the goods and services you purchase.
Although the ITC is related to GST, the ITC is a separate credit.
What do I need to do?
You can claim an ITC if:
- your business is registered for GST
- you intend to use your purchase solely or partly for your business, and the purchase does not relate to making input-taxed supplies
- the purchase price included GST
- you provide or are liable to provide payment for the item you purchased
- you have a tax invoice from your supplier (for purchases more than $82.50).
