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.

Reimbursement and Disbursement

For the purpose of GST, the term "reimbursement" refers to the recovery of an expense that you incur as a principal from another party. A reimbursement may be subject to GST if it is consideration for a supply of goods or services.

On the other hand, the recovery of a payment made on behalf of another party by you as an agent is termed as a "disbursement". A disbursement does not constitute a supply and hence, is not subject to GST.

GST Treatment of Recovery of Expenses

The following table shows the GST treatment when you recover expenses from another party, including whether you can claim the input tax incurred:

  If you have incurred the expenses as a principalIf you have incurred the expenses as an agent

The recovery of expenses is

a reimbursement

a disbursement

GST treatment

The recovery of expenses amounts to a supply unless the recovery is compensatory in nature and no goods or services are provided in return to the paying party. If the recovery of expenses amounts to a supply, it is subject to GST unless it qualifies as an exempt supply.

The recovery of expenses does not constitute a supply and is not subject to GST.

Input tax claim

You are entitled to claim input tax incurred on goods or services procured if the recovery of these expenses constitutes a taxable supply.

You are not entitled to any input tax claim since the goods or services are not supplied to you but to your principal.

Please refer to the e-Tax Guide "GST: Guide on Reimbursement and Disbursement of Expenses" (PDF, 585KB) for more information on:

  • How to establish if you are acting as principal or agent in procuring goods or services
  • Examples illustrating the correct GST treatment to apply for the reimbursement and disbursement of expenses


I received a tax invoice addressed to my company for $109 ($100 + GST $9). I need to invoice another company to recover the amount. Do I need to charge GST? If yes, what should be the value of my supply?

If you have incurred the expense as a principal and you are not recovering the expenses as part of any primary supply to your customer, you must charge GST when you recover the amount if the recovery of expenses amounts to a standard-rated supply. It is your business decision on how much you value the supply made when you issue the invoice.

However, if you charge a mark-up, the GST treatment for the mark-up is based on the separate supply of service (e.g. arranging fees, administrative fees etc).

For more information, please refer to the e-Tax Guide  "GST: Guide on Reimbursement and Disbursement of Expenses" (PDF, 585KB) 

When my Human Resource Dept bills the Accounts Dept within the same company, will this billing attract GST?

Intra-company transactions are disregarded for GST purposes. In this case, both departments are within the same company. Hence, no GST is chargeable.

Company A contracts audit services from my company. My company incurred transport fares for travelling to Company A’s office to conduct the audit. Does my company need to charge Company A with GST when we recover the taxi fares?

You acquired the transport services as a principal in your own capacity and are legally obliged to pay the transport service providers. The services acquired are used directly in the course of performing your audit work. The recovery of these expenses from Company A is a reimbursement and is subject to GST.

Is the recovery of expenditure for air tickets zero-rated?

If you are merely buying air tickets on behalf of another company and there are no other related services provided, the recovery of expenditure for air tickets can be zero-rated (i.e. GST is at 0%).