Creditable Acquisitions

A Creditable Acquisition (or creditable importation) must be made in order to entitle one to an input tax credit. Under s 11-5 of the A New Tax System (Goods and Services Tax) Act 1999, a creditable acquisition is made by an entity if:

a) the entity acquired anything solely or partly for a creditable purpose

b) the supply of the thing to the entity is a taxable supply

c) the entity provides (or is liable to provide) consideration for the supply, and

d) the entity is registered or required to be registered.

Therefore, NO input tax credits will be available where

• Acquisitions are made by unregistered entities

• No consideration is provided in respect of a supply

• The supply is not a taxable supply

What is a Creditable Purpose?

A taxpayer acquires a thing or imports goods for a creditable purpose to the extent that it is acquired or imjported by the taxpayer in carrying on an enterprise.