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Related company and other third party

  • The GST treatment for the recovery of expenses from another party such as your employees, customers, related corporations or suppliers, depends on whether the expenses are incurred by you as a principal or as an agent.

  • When you assign your employee to work for another company under a secondment arrangement, you may recover salary and staff related costs from that company. The secondment is regarded as a provision of human resource services i.e. there is a supply. Generally, the recovery of expenses relating to the secondment is subject to GST.
  • When a business is transferred, business assets are usually transferred. This is similar to a sale or disposal of business assets. The GST-registered transferor has to account for GST on the supply.
  • Outright grants, with no direct benefits given to the grantor, are not subject to GST.
  • Outright donations, with no benefits given to the donor, are not subject to GST.