Definition
An input tax credit (ITC) is the amount of GST or HST a registered business reclaims on its taxable purchases through its periodic GST/HST or BAS return, reducing the net tax payable to the relevant tax authority. It is the AU, CA, NZ, and SG equivalent of UK input VAT and operates on the same mechanic: tax paid on inputs offsets tax collected on outputs, with the net being payable to or refundable from the tax authority.
What an input tax credit means in practice
For a bookkeeper, the ITC is the daily recovery operation on every supplier invoice. Each bill captured in Xero or QuickBooks splits between the net cost (to the expense account) and the tax portion (to the GST/HST control account). At the end of the period, the control account total is the ITC figure that appears on the return.
The documentation discipline is what makes ITCs hold up on audit. The supplier’s tax-registration number (ABN in AU, BN in CA, GST registration number in NZ and SG) must be on the tax invoice. The buyer’s identity must be present above the country-specific threshold. Below the lower threshold a regular receipt is sufficient. Most ITC disallowances on audit come from one of three patterns: missing tax invoice (supplier gave a quote or a card receipt only), tax invoice missing the supplier’s tax-registration number, or the supply being for personal use rather than business use.
A practical example: an AU consultancy in Q1 2026-27 (Jul-Sep 2026) pays AUD 22,000 GST-inclusive on supplier invoices. The GST portion is AUD 2,000. The bookkeeper reviews the documentation: all 22 invoices carry a valid tax invoice with ABN; one of them (AUD 350 of GST on a hotel bill with the consultancy’s name slightly mistyped) the supplier amends. The ITC for the quarter is AUD 2,000, claimed on the BAS in label G14 (non-capital purchases). Net GST payable: output GST minus input GST minus AUD 2,000.
How input tax credits work by country
Australia
The ATO uses “input tax credit” as the formal name under GST. Documentation thresholds: under AUD 82.50 no tax invoice needed (a regular receipt suffices); AUD 82.50-1,000 tax invoice with the seven required details (intended-as-tax-invoice label, supplier identity, ABN, date, description, GST amount, taxable supply extent); above AUD 1,000 add the buyer’s identity. Claimed on the BAS in label G11 (capital purchases) and G14 (non-capital purchases).
Canada
The CRA uses “input tax credit” (ITC) as the formal name under GST and HST. Three tiers under the Input Tax Credit Information Regulations: under CAD 100 simplified (supplier name, date, total); CAD 100-499.99 intermediate (adds supplier BN, GST/HST amount, status indication); CAD 500+ full (adds buyer name, description, payment terms). Claimed on the GST/HST return at line 108.
New Zealand
New Zealand uses “input tax” or “input tax credit” under GST. IRD documentation thresholds: under NZD 200 till receipt sufficient; NZD 200-1,000 intermediate; above NZD 1,000 full taxable supply information. Claimed on the GST101A return at the appropriate line for the registration frequency.
Singapore
Singapore uses “input tax” (not “input tax credit”) under GST. IRAS section 19 of the GST Act sets out reclaim conditions: the goods or services must be supplied to the business, the business must be GST-registered, the supply must be used for taxable purposes, and the tax invoice must show the supplier’s GST registration number. Reported on the F5 return.
United Kingdom
The UK does not use “input tax credit”. The equivalent concept is input VAT, which is reclaimed through box 4 of the quarterly VAT return submitted under MTD.
Related terms
Input tax credits sit at the centre of indirect-tax compliance in four of our five target countries:
- GST is the AU, NZ, CA, and SG tax this concept sits within.
- HST is the Canadian harmonised variant.
- VAT is the UK equivalent regime.
- Input VAT is the UK term for the equivalent reclaim.
- A tax invoice is what supports every ITC claim.
- The BAS is the AU return on which ITCs are reported.
See also
For the full Australian regime, see the AU GST and BAS guide. For Canadian, see the CA GST and HST guide. For New Zealand, see the NZ GST guide. For Singapore, see the SG GST guide.
FAQ
See the answered questions above for ITC vs input VAT, documentation rules, and registration as a prerequisite.