ANSWER ID:1823, 32926Image Removed When importing goods from overseas, GST is levied at 15% of the landed - cost of the goods and is payable to the Customs customs agent, not your overseas supplier. The GST paid to Customs customs needs to appear in box in Box 13 of the GST return *, so you need to create one purchase order (bill) to bill to record the overseas purchase and another purchase order (bill) another bill to record the costs associated with the import. A Customs agent is usually employed to handle The customs agent usually handles the costs associated with the import. Generally, the Customs customs agent will arrange payment for, and and collection of, the goods on arrival in New Zealand, and may pay your customs duty, freight, insurance and GST liability. You will need to reimburse the Customs customs agent for these costs. *This support note is for businesses reporting their GST on a Payments Basis. Our support note GST paid to Customs for imported goods - Invoice Basis is for those reporting on an Invoice Basis. Setup Go to the Accounts command centre and click Accounts List and ensure the following two Liability accounts exist. You can create an account by clicking New.The way you record overseas purchases varies depending on your GST reporting basis (Payments or Invoice). UI Text Box |
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| Check with an expert! We're not experts when it comes to overseas purchases and import costs. For specific advice relating to your circumstances, check with your accounting advisor or try the MYOB Community Forum. |
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title | If you're using the Payments basis |
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| Setting upTo track your overseas purchases and ensure the GST is reported correctly, you'll need to set up the following: - Create two liability accounts (Accounts > Accounts List > Liability tab > New).
- GST Input Tax Adjustments -
| This account should be linked to the GST return where it will be reflected in box 13.- this account might already exist in your company file
- GST Paid to Customs -
| This - this account will hold the value of GST paid to
| Customs. Here are our examples: Image Removed new GST on go to the Lists menu and choose , then click NewGo into Here's our example: Image Removed
Image Added- Link the GST Input Tax Adjustments account to box 13 on your GST return.
- Go to the Accounts command centre and click Prepare GST
| return- Return.
- Select the GST Input Tax Adjustments account
| in Box See below.Image Removed Methods of recording overseas purchases Method 1: Record the overseas purchases, treating the import costs as expense items. Method 2: Record the overseas purchases, including all costs in the item value.
Method 1: Record the overseas purchases, treating the import costs as expense items Create an Expense - Image Added
- Click Preview GST Return to ensure this is saved.
- Close the GST return.
- Create an Expense account (or Cost of Sales) account for the Customs Agent's charges.
| See our example below. Image RemovedCreate a bill (Purchases > Enter Purchases) to record the purchase from your overseas Supplier as normal, excluding the GST. If the supplier charges you freight, this will need to be included on this purchase. Here's our example. Image RemovedCreate a separate bill for the imports costs paid to the customs agent (not including any freight charged by the supplier).Enter the Import Agent's/Customs' charges, using - Here's our example:
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Recording the overseas purchaseDepending on how you want to treat the imports costs, there's two ways you can record the overseas purchase and account for the GST. UI Expand |
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title | Treat the import costs as expense items |
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| Create a bill for the purchased goods. Exclude the GST by deselecting the GST Inclusive option, and coding the purchase using the E GST code. Here's our example: Image Added UI Text Box |
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| If the supplier has charged you freight costs, this should be included on this bill. |
- Create a separate bill for the import costs paid to the customs agent.
- For the customs charges, allocate it to the Customs Agent Charges expense account created earlier, and use the E GST code to exclude any GST.
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| On another line, enter the value of the total GST on the Import, using the Allocation Account - For the GST on the import, allocate it to the GST Paid to Customs
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| . Code this line as GST Exempt use the expense account created above, allocate it to the GST Paid to Customs liability account and use the S15 GST code. For any other expenses the
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| Customs enter as below, selecting the E.Make sure the GOI GST Code is applied to the GST on Import . See our example below. Image Removed Note: - Pay these bills as usual.
Transferring the GSTBefore running your GST return, you need to determine the GST |
| Return, run the GST value from the import, then transfer this amount to the GST Input Tax Adjustments account. Here's how: - Run the GST [Detail - Payments]
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| report, filtered for the - report (Reports > Index to Reports > GST > GST [Detail - Payments]). Filter the report for the GOI (GST on Import) GST
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| Code for - code for the relevant period. Here's our example:
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| Image Removed a journal Record go to the Accounts command centre and click - Accounts > Record Journal Entry) to
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| transfer the balance from the - transfer the balance from the GST Paid to Customs
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| account to the - account to the GST Input Tax Adjustment account.
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| See our example below. Image Removed Prepare your GST Return as usual - remember to enter the GST Input Tax Adjustments account for Box 13 (as shown above). As shown in the following example, Box 13 should show the applicable Method 2: Record overseas purchases, including - Here's our example:
Image Added - Prepare your GST return as usual. Here's our example showing Box 13 with the applicable GST amount:
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UI Expand |
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title | Include all costs in the purchased item's value |
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| - Create an
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| Expense - inventory item to track the GST on imports.
- Name the item gstcustoms (or
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| Cost of Sales) account for the Customs Agent's charges if you don't already have one (see example above). Create a new inventory item called GST on Imports. Indicate that the item is 'I buy' only and that the Expense account it is linked to is - similar).
- Select the option I Buy This Item.
- For the Expense Account for Tracking Costs, select the GST Paid to Customs
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| account. This may prompt a warning that costs are usually allocated to an Expense account - disregard this warning. See our example below. Image Removed
- liability account created earlier (ignore the warning about the type of account you've selected).
- Click the Buying Details tab and select E as the GST Code when Bought.
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Record the initial purchase of goods from the supplier as shown in - Here's our example:
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Create a bill for the purchased goods, excluding any GST. Here's our example:
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| Image Removed Record the bill from the Customs Agent. When entering the bill:Image Added UI Text Box |
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| If the supplier has charged you freight costs, this should be included on this bill. |
- Create a separate bill for the import costs paid to the customs agent.
Select the Item layout. Enter a
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| line on the purchase for the item created above. Enter the value of that freight/insurance costs to Note: You must enter zero quantities in the Received column. This is because you want to increase the stock's total Enter zero for the Received quantity for these lines to ensure you increase their value only and not the quantity on hand. Use the N-T GST code for these lines. If any local freight has been charged, allocate this to the applicable freight account and use the S15 GST code. Here's our example:
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| Image Removed the invoice these bills as usual.
Transferring the GSTBefore running your GST return, you need to transfer the GST amount to the GST Input Tax Adjustments account. This will increase the average cost of the item(s) and ensure the GST is reported at Box 13 of your GST return. Here's how: Record a journal entry (Accounts > Record Journal Entry) to transfer the balance from the GST
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| amount from GST to account to the GST Input Tax
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| adjustmentsAdjustment account. Here'
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| s our example: Image Removed This journal entry ensures the GST is reported in the GST Return at Box 13. Note: This transaction will increase the average cost of the item(s) and include GST on the Return as shown in the following example. Image Removeds our example: Image Added - Prepare your GST return as usual. Here's our example showing Box 13 with the applicable GST amount:
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title | If you're using the Invoice basis |
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| Setting upTo track your overseas purchases and ensure the GST is reported correctly, you'll need a liability account to hold the GST paid by you to the customs agent. This account will need to be linked to Box 13 on your GST return. - Check your accounts list for a liability account called GST Input Tax Adjustments (go to Accounts > Accounts List > Liability tab). If the account doesn't exist, click New to create it.
Image Added - Link the GST Input Tax Adjustments account to Box 13 on your GST return.
- Go to the Accounts command centre and click Prepare GST Return.
- Select the GST Input Tax Adjustments account for box 13. Here's our example:
Image Added - Click Preview GST Return to ensure this is saved.
- Close the GST return.
- Create an Expense account (or Cost of Sales) account for the Customs Agent's charges. Here's our example:
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Recording the overseas purchaseDepending on how you want to treat the imports costs, there's two ways you can record the overseas purchase and account for the GST. UI Expand |
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title | Treat the import costs as expense items |
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| Create a bill to record the purchase from the overseas supplier. Exclude the GST by deselecting the GST Inclusive option, and coding the purchase using the E GST code. Here's our example: Image Added UI Text Box |
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| If the supplier has charged you freight costs, this should be included on this bill. |
- Create a separate bill for the import costs paid to the customs agent.
- For the customs charges, allocate it to the Customs Agent Charges expense account created earlier, and use the E GST code to exclude any GST.
- For the GST on the import, allocate it to the GST Input Tax Adjustments liability account and use the E GST code to exclude any GST.
For the import duty charged by the customs agent, allocate it to the Customs Agent Charges expense account created earlier, and use the S15 GST code. For any other expenses the customs agent may be charging you, for example overseas freight and/or insurance, allocate it to the applicable expense account and use the E GST code. If any local freight has been charged, allocate this to the applicable freight account and use the S15 GST code. Here's our example: Image Added
- Pay these bills as usual.
The above purchase will increase expenses and include the GST in Box 13 of your GST return. Image Added |
UI Expand |
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title | Include all costs in the purchased item's value |
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| - Create an inventory item to track the GST on imports.
- Name the item GST on Imports (or similar).
- Select the option I Buy This Item.
- For the Expense Account for Tracking Costs, select the GST Input Tax Adjustments liability account (ignore the warning about the type of account you've selected).
- Click the Buying Details tab and select E as the GST Code when Bought. Here's our example:
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- Create a bill for the purchased goods, excluding any GST. Here's our example:
Image Added Create a separate bill for the costs paid to the customs agent. Select the Item layout. Enter a line for the GST on Imports item created above, and enter its price as the GST paid to customs. Enter extra lines for each item the import bill applies to, and add a portion of the import costs to each line. Enter zero for the Received quantity for these lines to ensure only their value is increased and not the quantity on hand. Here's our example: Image Added
Pay these bills as usual.
The above purchase will increase expenses and include the GST in Box 13 of your GST return. Image Added |
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