Australia

Saasu supports Australia Zone in for GST Tax, Tax Invoices, Recipient Created Tax Invoices and Pay-as-you-go Payment Summaries (PAYGPS)

GST Tax

Saasu supports Australian Tax Codes for the sale of goods and services. Updates are provided as a standard part of the service. See the ATO website for full details.

Tax Invoices

Saasu supports the following ATO tax invoice requirements for Valid tax invoices and GST credits

Ensure that you include your ABN in your document templates and your recipients ABN where required by including the Merge Field {BusinessContactIdentifier} in your invoice template. Where the GST to be paid is exactly one-eleventh of the total price, show the GST amount separately or provide a statement such as ‘total price includes GST’. Include statement as required via PDF Invoice Template. Where the GST to be paid is less than one-eleventh of the total price, show the GST amount and the total amount excluding GST for the sales. Include * (asterix) in Item Code and/or Description to denote Taxable Items.

Entering BAS Payments

If you are paying a tax bill enter the transaction as a Purchase. If you are receiving a tax refund enter it as a Sale. Use the Service type of Purchase or Sale. We will use an example to demonstrate one method for capturing BAS transactions. Example:

You have prepared your BAS and as a result you established you obligations for the BAS period to be:

• Collected $1000 in GST (1A on the BAS)
• Paid $500 in GST (1B on the BAS)
• Withheld $2000 in PAYG withholdings tax on staff wages (4 on the BAS)
• PAYG Income Tax Installments are $300 (5A on the BAS)

Note: Net you owe the ATO [ $500 GST + $2300 PAYG ] = [ $2800 BAS ]

1. From the main menu select the + icon next to Purchase. This will bring up the Add Purchase screen.
2. In the Add Purchase screen, [Service] and [Invoice] will already be selected from the picklists.
3. Enter the Date to be the date that you worked out your BAS obligations.
4. The Invoice# number can be set to whatever is meaningful for you. An example might be ” ATO-FY2005-Q4″.
5. The Purchase Order# number can be set to be the ATO document ID found on your BAS form as an example or left blank.
6. The Contact can be set to ATO.
7. The Due Date is the date your BAS form and payment is due to be remitted (top right of BAS form).
8. For the invoice items (Account, Tax Code, Amount):
   

   Account	Tax Code	Amount
   Liability: Tax Collected from Sales		1,000
   Asset: Tax Paid on Purchases		* -500
   Liability: Employee PAYG Payable		2,000
   Liability: PAYG Installments Payable		300
   Total Amount		2,800

   * Negative Amount for refund item

   If you can’t see the tax and payroll accounts mentioned above, go to Settings > Accounts List, and tick both payroll and tax accounts checkboxes.

9. If you are paying the transaction now online or otherwise you can apply a payment to the invoice by clicking the Save button which will make the Apply Payment button available. Otherwise use the Quick Payment section to complete the transaction. If you plan to make payment at a later time click the Save and Close button to leave the transaction unpaid.

You can also enter tax transactions using the Journal screen. However, using the Purchase and/or Sale screens to do this allows you to attach the ATO as the contact to the transaction. This then also allows for easier tracking of transaction history with the ATO by you and your accountant in the future.

Part GST Free Transactions

Quite often Items in a Tax Invoice have GST and others don’t. In this situation each line of your invoice would have an appropriate code. e.g. Say you had a purchase for Milk and a pack of pens from Woolworths for business use then it may look like this as an example:

Description	Tax Code	Amount
Pens	G1 Sale Inc GST	$5.50
Milk	G1,G3 Sale GST Free	$2.30
Total GST $0.50
Total inc GST $7.80

Wine Equalisation Tax

Saasu doesn’t yet support WET in the Business Activity Statement (BAS) Reports. At present you would need to consider our suggestion below and consult with your advisor as to it’s suitability for your specific circumstances.

This solution displays the WET separately as per ATO requirements. It is added as a separate line item in the Tax Invoice. In the following example 100.00 Example:

1. Entering in Exc Tax mode
2. Line Item would be entered as follows:
   

   Account	Tax Code	Amount
   Income: Wine Wholesale Sales	G1	100.00
   Liability: WET Payable	G1	29.00

   This generates $12.90 of GST and $29 of WET = Total Inc GST $141.90

The BAS would have $141.90 at G1 which is correct but for the WET numbers at 1C on the BAS you/your accountant would need to calculate these because we don’t provide them.

We recommend that you get your accountant to check our approach which is a general example. Saasu doesn’t formerly support WET as yet.

Related Links

Guide to Activity Statements – Completing the WET labels
Using invoices with a WEG label in the wine industry

RCTI’s

Recipient Created Tax Invoices (RCTI’s) are for businesses that wish to make commission payments subject to Australian Taxation Office rules. Saasu supports RCTI’s through the Type drop down in the Purchase screen.

Can I issue RCTI’s?
Please see the ATO Recipient created tax invoices guide for information or speak to your Advisor as to the suitability for your business to use this feature.

Can I create an RCTI automatically each time I create a Sale transaction?
You can quickly create a RCTI immediately as you save your Sale transaction by following these steps:

Note: This applies only to sales where they are created in the Item layout (not the Service Layout)

1. After entering a Sale transaction but before saving it choose Do More > Save and create purchase instead of Save or Save and Close.
2. A Purchase screen will load automatically with replicated information from your sale except it will be a Purchase for the Item(s) you have just created a Sale for.
3. Change the Contact to be the legal entity Contact you are paying commission to (instead of it being the supplier if it is set).
4. Change the Item code to the one you have setup for commission payments. As an example you would have set this Item up as follows:
   • Item Code: XYZC
   • Item Description: XYZ widget (Commission)
   • Buying Price: $200
   • Note: Consider the tax treatment for your specific circumstance here and setup the Tax on this Item accordingly.
5. Save, Print and/or Email the transaction as required for your workflow.

What this achieves is the habit of creating a commission payment every time you create a Sale. It’s not guaranteed to ensure you have captured all commission payments because there is still room for human error. Generally speaking you still need to be following your internal reconciliation procedures at the end of each accounting period to be sure you have captured them all. This can be assisted by running a list of RCTI’s from the Purchase screen filtered for RCTI’s for the period that you can then use to compare to other reports or mechanisms you have internally to check commissions payable/paid. It’s really an accounting workflow issue so seek advice from your Advisor about a good approach for your specific workflow.

GST Private Use

Saasu has G11,G15 Private Use tax codes inbuilt for Australian files. When you add a Purchase that is fully or partly for private use you can apply this tax code to the private portion. You may need to enter your purchase with two lines. One line for the claimable GST portion and the other for the private portion that needs the GST Private Usage tax code against it.

To activate this tax code:

1. Go to Settings > Tax Codes
2. Filter for show All tax codes.
3. Navigate down to the G11,G15 codes and open the one(s) you need and in the Options section tick the Active checkbox and save this change.

ABN Withholding Tax

You may be paying a supplier who hasn’t given you a valid ABN. In this case the ATO expects you to withhold 46.5% of the payment and remit it to the ATO via the BAS/IAS. To do this you can enter a Purchase transaction as per the following example for $1,000 but no ABN has been supplied:

1. First go to Settings > Tax Codes.
2. Choose Show all "inactive" codes.
3. Click to open the W4 – Withheld Payment (No ABN) tax code.
4. Set this code to Active and tick the Visable on Purchases option.
5. Enter a Purchase transaction with these lines:
   

   Account	Tax Code	Amount
   Expense: Consulting Fees		535
   Expense: Consulting Fees	W4	465
   Liability: ABN Withholding Tax Payable		-465

6. Later when you pay your BAS/IAS you will code the ABN withholding portion to the Liability: ABN Withholding Tax Payable account to clear it.

FAQ’s

Transactions with tax codes don’t appear in my BAS Reports?

There could be a couple of reasons:

• Quotes and orders ARE NOT included in the BAS report. You need to convert them to tax invoice first. If you’re using Tax Code report, there’s an option for you to include orders in the report.
• Cash vs Accrual mode. For sales and purchases, cash mode works off the payment date whereas accrual works off the invoice date.
  E.g. Let’s say you have a sale with G1 tax code on first quarter (Jan – Mar) but payment for this invoice is in the second quarter (Apr – Jun), then this amount will be reported on first quarter under accrual mode but second quarter under cash mode.

What tax code should I use for a transaction?

Saasu isn’t an accounting advisory service so we can’t answer this type of question. We have a simple Australian Tax Codes list made up from information supplied on the ATO website but it is general and educational only and shouldn’t be relied upon for specific circumstances.

How do I enter a BAS Payment?

Entering BAS Payments is done using a Purchase Invoice. The ATO is a creditor (if you owe Tax) so a Purchase with a due date works as one way to track remittance payments with the ATO.

Why can’t I print and send a BAS form from Saasu?

If there was one or even just a few forms the ATO requires then we would build this into Saasu. The variety of form layouts and unique information prevents us doing this. We believe that the vast majority of businesses can’t or won’t remit a self printed BAS form from accounting software to the ATO due to unique identification codes and other pre-filled information etc. required on their forms. Accordingly, for the time being we don’t have plans to support this.

Why does the income in my Profit and Loss differ to the BAS?

Quite often this is because companies in Australia are run as Cash for GST and Accruals for Company Tax. It’s a good idea to know whether you are “Accruals” for Income Tax purposes even though you are “Cash” for GST. Quite often customers assume they are “Cash” reporting for everything but later find out they are actually Accruals for reporting Income and Expenses for Tax purposes (Company Tax) but are Cash for GST purposes. This is quite common and we suggest users check with their accountant or the ATO.

Why is my BAS income different to the income shown on the Dashboard Profit and Loss?

Profit and Loss reports accruals basis. You may be running a “Cash” BAS and comparing it to the "Accruals" P&L Summary on the dashboard. To get a better comparison you need to compare Cash Profit and Loss with Cash BAS.

Does Saasu Accruals accounting?

Saasu provides for both Cash and Accruals. Reports like the P&L have both Cash and Accruals versions while the Balance Sheet by its nature reports assets, liabilities and equity on an Accruals basis so there is only one version. Balance Sheet reports display what you owe and what you own even if in a Cash accounting sense these items haven’t been paid for.

Does Saasu do Group Certificates (PAYG Payment Summaries)?

PAYG Payment Summaries can be prepared in the Reports area under the Payroll Section.

Why do Sales appear twice in the BAS when I use G2, G3 or G4 related tax codes?

This is a common misunderstanding made by customers not familiar with how the BAS works with respect to Exports [G2], Other GST Free Sales [G3] and Input Taxed Sales [G4]. Sales enter the BAS at G1 and some are removed via G2, G3 and G4 (Total for which is G5). This generates the Sales subject to GST at G8. Saasu does this according to ATO specifications.

GST upfront on contracted payments?

Sometimes you may purchase a product or service on a payment plan. The seller maybe be liable to collect GST upfront and might accordingly charge you the full GST amount along with the first payment. In Saasu enter the full contracted amount with GST as a Purchase Invoice. Add a Purchase Payment each period to this invoice. If you account for GST on a Cash basis then Saasu will include payments made in that BAS period in your BAS report run. If you account for GST on an Accruals basis and are entitled to claim your GST credit upfront then Saasu includes the full GST amount in the BAS when run in Accruals mode.