Transcript 幻灯片 1

Lesson 9
Goods and Services Tax
Li, Jialong
2011-2-26
Goods and Services Tax
 Readings to de completed: PDF file GST
for Small Business
GST Fundamentals
 GST = Goods and Services Tax.
 It is a tax on supply of goods.
 It is a tax you charge your customer.
 A business has a legal obligation to collect
tax and pass the tax to Australian Tax Office
(ATO).
Other GST Terms
 GST free = no tax to charge to the customer.
 Input tax = GST cannot be charged to the
customer so the business pays the GST and
this adds to the costs of the business.
 Input credits = tax you claim back from ATO.
GST Formulas
 10 % added to Exclusive price
GST = price x 0.10
GST = price x 10 /100
 110% is the inclusive price, ie the GST amount is
1/11 of tax inclusive price
Total price including GST = price x 110%
Total price including GST = price x 1.10
 Example:
Bought item for $165
165 / 11 =15
15 is the tax credit or GST component
How the GST Works
1. A registered business purchases goods or services which
includes GST
2. Business can now claim an “input tax credit” for the GST paid on
purchases
3. Business charges and collect GST on sales
4. Tax is paid in full by the end customer (consumer)
5. The business in its Business Activity statement calculates the
amount of tax to send by: Amount sent to ATO =GST Collected from customers– GST
paid on supplies and expenses
What is Input taxed?
 Definition: When a BUSINESS is charged GST on a
purchase and that business is not allowed under the
GST rule to charge their customer any GST in their
prices, they are said to be INPUT TAXED.
 The Tax is therefore paid by the business and not its
customer. This is not a common situation and the
main types of business’s that are affected are:
• Landlords who can’t charge GST on residential rent
• Financial services businesses
• Non GST Registered businesses ( under $75,000
and chose to opt out of the GST process
What are the two main types of input taxed?
You do not include GST in the price of input
taxed sales you make and you cannot claim
GST credits for purchases that you use to
make input taxed sales.
The two most common input taxed sales for
small businesses are:
■ financial supplies INTEREST from
financial institutions
■ renting or selling certain supplies of
residential premises.
Business Activity Statement (BAS)
 You use an activity statement to report your
business tax entitlements and obligations,
including GST, pay as you go instalments,
pay as you go withholding and fringe benefit
tax instalments. An example of a BAS is
below.
Business Activity Statement (BAS)
Business Activity Statement (BAS)
Review Questions
 PDF File GST for Small Business
 GST Cash/Accrual Reporting
 GST Free
 BAS
Exercises
 Exercises 9.1-9.4
Reading and Resources
 Study Notes Lesson 9
The End of Lesson 9