If your business is registered for goods and services tax (GST), you can only claim the GST exclusive amount as a deduction on your tax return. This is because you claim the GST component of the expense in your business activity statement (BAS).
If you buy a $3,000 laptop which includes $272 GST, and you use the laptop 100% of the time for business, you can claim a GST credit of $272 in your BAS and the remaining $2,728 as a deduction in your business tax return.
If you have a business that is registered for GST, you have to apportion the GST credit, if you buy something that is for both business and private use.
If you use the laptop 50% for business and 50% for private use you can claim 50% of the GST credit which is $136 in your BAS and 50% of the remaining amount (which is $1,364) in your tax return. You cannot claim a GST credit for the portion used for private purposes.
Companies generally don’t apportion expenses for private use. If the company is paying for private expenses, fringe benefits tax (FBT) may apply instead.
Finally, if you use an item in your business for only part of a year you generally need to restrict your claim to the period it was used for the business.
