- Created by admin, last modified by AdrianC on Feb 08, 2016
This information applies to MYOB AccountRight version 19. For later versions, see our help centre.
https://help.myob.com/wiki/x/rAGc
ANSWER ID:9270
There are certain types of transactions that are considered input-taxed, and there are special provisions for recording and reporting these types of transactions. This support note explains what these are and how AccountRight enables you to handle them correctly.
This support note is for guidance only. You should always seek advice from your accounting advisor or the ATO regarding how tax should be applied in your circumstances.
Generally you can't charge GST for input-taxed supplies. In addition, you are not entitled to input tax credits for the GST paid on the items/services you acquired to make the supply.
Input-taxed items/services may include:
- financial supplies (including most transactions relating to money),
- existing residential premises,
- residential rents, and
- second and subsequent supplies of precious metals after refining.
For example, if a supplier charges a landlord $1100 including $100 of GST for some work done to the landlord's residential property. The supplier will enter this $100 GST amount on the Business Activity Statement.
When the landlord charges the tenant for $400 rent, no GST amount can be added or included in this charge. In addition, the landlord can not claim input tax credit for the work done to the residential property.
To assist reporting input-taxed purchases on your Business Activity Statement (BAS), you can allocate an "Input-Taxed" (INP) tax code to those transactions. The default tax code (which might already exist in your company file) is set up as shown in the following example.
Unlike all other tax code types, "Input Taxed" tax type codes do not need to be linked to tax collected and tax paid accounts.
If you enter input-taxed purchases as tax exclusive, set the Rate at 10%.
If you enter input-taxed purchases as tax inclusive, set the Rate at 0%.
When you use this tax code for an input-taxed item, no amount will be allocated to the GST liability account. The full amount will be allocated to the expense account specified at the time of recording the purchase. When you run GST reports, any amounts that have been allocated to the INP tax code and are listed in the Purchase Value and Tax Paid columns, need to be added together and reported at G13 on the BAS.
To assist reporting input-taxed sales on your BAS, you can allocate an "input-taxed" (ITS) tax code to those transactions. The default tax code (which might already exist in your company file) is set up as shown in the following example.
For more information on setting up tax codes, see the AccountRight help.