I get asked this question quite alot......
When I installed MYOB all the accounts default to the N-T tax code and BASlink was not set up. Why is this and how do I set it up?
Answer:
Under the new legislation introduced in March 2010, setting up default tax codes and linking these to your BASlink constitutes a BAS service and relates to a BAS Provision. A BAS service includes activities such as:
• preparing or lodging a BAS form about a taxpayer's liabilities, obligations or entitlement under a BAS provision;
• giving advice about a BAS provision that the taxpayer can reasonably be expected to rely upon to satisfy their obligations; and
• dealing the Commissioner on behalf of a taxpayer in relation to a BAS provision.
A BAS provision refers to the payment of GST, wine equalisation tax, luxury car tax, pay as you go (PAYG) instalments, PAYG withholding tax, fuel tax and fringe benefits tax..
Simply put, this means that only a qualified BAS Agent or Registered Tax Agent can determine your default tax codes or link tax codes for BASlink as this is interpreted as giving you advice about your GST and PAYG obligations.
As MYOB is not a BAS Agent and nor are they a Registered Tax agent and each business has differing requirements and registrations, you must determine default tax codes and setup BASlink yourself or alternatively contact a qualified BAS Agent like Imprest Business Services to set this up for you!
Below are some suggested tax codes and their uses. To edit accounts, Click the white arrow next to the account number then select the details tab and edit the Tax code.
GST - Goods & Services Tax
GST transactions where claimable by the business
FRE - GST Free
• Bank Charges
• Payments to suppliers who have an ABN but are not registered for GST
• Donations
• Interest Expense
• Australian Securities and Investments Commissions (ASIC)Fees
• GST free food items & other free items under the Act
ITS - Input Tax Sales
Expenses where an input tax credit is available however is prohibited under the Act to claim the GST because those expenses are deemed input taxed e.g.
• residential rent income
• Expenses to financial suppliers e.g. interest income
INP - Input taxed
Aquisitions for making input taxed supplies e.g.
• resedential rent expenses
• financial supplies
N-T - Not Reportable
• Wages
• Superannuation
• Tax Payments
• Fines
• Shareholder Loans
• Dividends Received/Paid
• Depreciation
• Principal payments on finance
• Private expenses, or private portion of expenses that are not tax-deductible
CAP - GST on Capital Acquisitions Capital expenses
e.g. plant & equipment
LCT - Luxury Car Tax
Only used by car wholesalers, when invoicing out a new car to a customer
EXP - Sales
Sales to overseas customers
If you have not used BASlink before, it is recommended that you have a qualified BAS Agent or MYOB Certified Consultant set this up correctly for you.