What does Input Tax Credit (ITC) Entitlement mean?

 

Since 2003, customers that use their vehicle as part of a GST registered business have been able to claim back the GST portion of their CTP premium from the Australia Taxation Office as an input tax credit (ITC) when lodging their business activity statements. Due to different tax treatments, the cost to the insurer of claims made by ITC entitled customers is higher than that for customers who are not entitled to an ITC. For this reason, CTP insurers charge a higher premium to GST registered customers that are entitled to an ITC. If you are registered for GST purposes and are able to claim the input tax credit on the premium, you must answer “yes” to the question “Is anyone entitled to claim an input tax credit on this vehicle?” This is the case even if you do not intend to claim the input tax credit. For further information contact www.ato.gov.au or speak to your taxation advisor.