Australia GST setup

[Christopher Lam]

Hi David, thank you for this experienced view.

A couple of issues from the illustrated RCTI as above:

1. Every RCTI includes both GST from sales and GST paid, and the difference
is then owed/receivable to the Tax office. Therefore, every transaction
will obligatorily include a split into the BAS account so that it balances
out. Hence the BAS account will accumulate splits from every income
transaction, rather than 4/year. The BAS account must also be kept uptodate
with every GST-claimable expense, etc. How annoying.

2. As it turns out, I run a GST-light enterprise (healthcare) therefore I
mostly have GST-free sales but pay GST through the service fee; therefore
each invoice leads to more GST that the tax office owes me. Hence in my
setup the GST belongs to the Asset root account, with Asset:GST:Paid being
an asset account, Asset:GST:Collected being an asset contra-account I
guess, and the Asset:GST:BAS being an asset contra-account. (btw do I tell
gnucash these are all asset accounts even though these are technically
asset contra-accounts?)

Perhaps the bottom line is that all RCTI transactions are better off being
split into the 'income + gst collected' and 'expenses + gst paid'
transactions. Therefore the GST:BAS account is only to be used for payments
to/from the tax office quarterly.

I think I will write these options as above more extensively into the wiki.

On 11 August 2016 at 14:00, DaveC49 <davidcousens at bigpond.com> wrote:

> Hi Christopher,
>
> You would normally treat the GST you owe the ATO on your Sales as a
> Liability as until you complete your BAS statement and pay it, it is money
> your business is going to have to pay at some future time. When you sell an
> item, the amount of the GST on that item will be credited to the
> Liability:GST:Sales account in that case. It is normal practice to set up
> the Liability:GST:Purchases as a Liability contra account, i.e. it is a
> Liability account and when you make a purchase, the GST on your purchase
> would be debited to the Liability:GST:Purchases account. Similarly the
> Liability:GST:BAS account in which you record the payments to the ATO is
> also a contra account and when you make a payment, it is debited to the
> Liability:GST:BAS account.
>
> You could make all three of these accounts subaccounts of a placeholder
> Liability:GST which will total the three accounts and reflect what you
> currently owe the ATO at any time.
>
> If you look back through past posts re GST  ( will be a couple of years ago
> ) you will find posts on how to setup the Tax Tables so that GST can be
> calculated automatically for you on invoices/bills when they are created
> and
> allocated automatically to the above accounts when the bill/invoice is
> raised.
>
> I am assuming you know what the other parts of the splits are for the sales
> and purchase transactions above. If not get back to me and I can give you a
> full breakdown for each transaction type of the credits and debits in the
> splits.
>
>
> David Cousens
>
>
>
> --
> View this message in context: http://gnucash.1415818.n4.nabb
> le.com/Australia-GST-setup-tp4686133p4686164.html
> Sent from the GnuCash - User mailing list archive at Nabble.com.
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>