Posted: Sat Nov 19, 2005 8:46 pm Post subject: tax codes
could you please differentiate when we should be using N-T. FRE or GNR.
We import goods from overseas. We dont pay GST directly to the overseas supplier. When we make out the purchase, what code to use? Customs collect the gst for the goods and we make another purchase for the customs forwarding agent who charges for his fees and gst collected by customs. Again, which code to use for this forwarding agent. I am confused whether I should use N-T, GNR or FRE
Here's a couple of extracts from Making the Most of MYOB that explain about tax codes. However, you can ignore the GNR code completely -- that was an old code that MYOB used in the very first GST versions and you don't need it anymore.
I've also written an industry-specific guide for Importers and Exporters that explains a little more about recording GST - go to MYOB's website and look for the 'Insight' or 'industry' guides.
Best of luck
17.4 How do I check my tax codes are set up correctly?
To view your Tax Codes List, go to your Lists menu and select Tax Codes.
GST (Goods and Services Tax)
The Tax Code Information for your GST code should look similar to what’s shown in Figure 17-2. Note that the Rate is 10% and the linked accounts are GST Collected and GST Paid.
FRE (GST-free goods and services)
Even if you don’t sell any GST-free goods or services, you’re bound to end up purchasing GST-free supplies, such as bank charges, donations or water rates. Note that the Rate is 0% for this code and the linked accounts are GST Collected and GST Paid.
CAP (GST on capital acquisitions)
If your business buys capital items over $300 (or $1,000 if your business is part of the Simplified Tax System), you should report these purchases separately on your Business Activity Statement. To do this, you need a separate tax code called CAP. Complete the Tax Code Information, as shown in Figure 17-3; note that the Rate is 10% and the linked accounts are GST Collected and GST Paid.
ITS (input-taxed sales)
If you received interest or dividend income, or if your business sells goods or services that are input taxed (residential rents, financial supplies, long-term accommodation, etc.) then you’ll need to set up ITS as a code in your Tax Code List.
You set up your ITS code in the same way as your FRE code: the Rate is 0%, the linked accounts are GST Collected and GST Paid and that the Tax Type is Goods & Services Tax (not Input Taxed).
N-T (No Tax)
The N-T code is a default tax code and you’ll find it already set up, ready to go. The Rate here should always be 0%.
17.5 What’s the difference between GST- free and No Tax?
If a transaction falls outside the GST ‘net’, then you code this transaction N-T (standing for ‘No Tax’ or ‘Not Reportable’). Transactions that fall into this category include:
• Wages and superannuation.
• Most internal transactions within a business, such as cash transfers, depreciation, movements in stock and loan repayments.
• Government charges such as financial institutions duty (FID) and bank account debits tax (BAD).
• Personal spending.
• Transfers from clearing accounts (for example, moving funds from your electronic clearing account into your business bank account).
On the other hand, if a product or service is GST-free, then you code this transaction FRE. Transactions that fall into this category include fresh food, unprocessed produce, many medical services and products, most educational courses, most child-care services, exports and some religious supplies.
The real distinction between GST-free and No Tax transactions is that No Tax transactions don’t get reported on your Business Activity Statement, but GST-free transactions do.
17.7 I’m an importer and an exporter. What codes do I need?
If your business exports goods or services overseas, then you’ll need to set up EXP (standing for Export) as a code in your Tax Code List. You set up your EXP code in the same way as your FRE code: the Rate is 0%, the linked accounts are GST Collected and GST Paid and that the Tax Type is Goods & Services Tax.
On the other hand, if you import goods from overseas, you’ll find that import duty tax codes work a bit differently than other types of tax codes. You’ll see that the tax amount doesn’t appear on purchase orders, since import duty is payable to the Australian Customs or your customs clearing agent, not to the supplier that you’re purchasing the goods from.
Visit www.myob.com.au/support/note and check out the following support notes: 1770 International Purchases and GST, 1771 Deferring GST on International Purchases and 2719 Importing Goods from Overseas.
Posted: Sun Nov 20, 2005 8:43 pm Post subject: tax codes
thanks Veechi for your help. We import computers from Taiwan. In my purchase for these goods, do I use N-T, or FRE?. I heard about this IMP. This is an import. Should I use this? The company in Taiwan sends us the invoice for the goods imported.
Now the customs sends us the invoice for GST on these goods on a separate invoice.
In the custom's invoice one item is GST we had to pay. Should I use FRE or NT for the GST being paid.? In other words, in my purchase, "GST" is one of the items. I cant use FRE as these are computer which the customs have charged the GST on. Should I use the N-T.? But again, I should report this for my BAS??
The answer to this question is quite lengthy. Have you already tried to download the document I suggested you download from MYOB's website called the Insight Guide for Importers and Exporters? I wrote these guides and I'm almost 100% certain that the answers to your questions can be found there.
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