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GST on Insurance

For the Insurer

Some types of insurance premiums are liable for GST (such as fire and general insurance). A registered insurer may claim deductions for payments to policy holders when they are made. A tax invoice is not needed. The insurer needs a tax invoice to deduct any other payments for claims on policies, such as a payment to a panel beater for repairs to an insured vehicle.

An insurer cannot claim for payments made under life insurance policies.

For the Insured

GST received on insurance payout is lieu of compensation/loss/expenditure is actually your income. If you receive an insurance payment relating to your taxable activity, you must include the GST content as an adjustment in Box 9 of the return covering the time you received the payment. (It is part of collected GST)