Financial supplies are input-taxed sales and do not have GST in their price.
You generally make a financial supply when you do any of the following:
- Lend or borrow money
- grant credit to a customer
- buy or sell shares or other securities
- create, transfer, assign or receive an interest in, or a right under, a superannuation fund
- provide or receive credit under a hire purchase agreement entered into before 1 July 2012, if the credit is provided for a separate charge that is disclosed to the purchaser. (For hire purchase agreements entered into after 30 June 2012, the provision of credit is taxable.)
In special cases, you may be entitled to claim a GST credit for a purchase that you use to make a financial supply if any of the following applies:
- you do not exceed the 'financial acquisitions threshold'
- your purchase relates to an amount you borrowed and used to make a non-input-taxed supply
- your purchase qualifies as a 'reduced credit acquisition' – you will be entitled to a reduced input tax credit.
See also
- GSTR 2003/9 Goods and services tax: financial acquisitions threshold
- GST and financial supplies – claiming reduced GST credits
- GST apportionment guide for financial supply providers
- GST definitions