The below five tax codes are the most commonly used.

 

T – GST 10%

A – GST Free

N – Non-Taxable

S - GST 10% Fixed Asset Sales and Purchases

X - GST Exempt (Overseas sales and purchases)

 

T – 10% GST

Most goods, services and anything else consumed in Australia are subject to GST. These are defined as taxable supplies. In such cases, ‘10% GST’ tax code (T) with a tax rate of 10% should be used.

Examples of transactions that incur GST

•Most stock purchases

•Professional service fees

•Most insurances (including TAC charge on VicRoads registration, greenslips etc)

•Electricity, gas, telephone and internet

•Freight/cartage

•IT expenses

•Fuel, road tolls and parking

•Uniforms

•Postage

•Merchant Fees

 

A – GST Free

Some goods and services purchased by a business are not subject to GST. These are called GST-free supplies. In such cases, ‘GST Free’ tax code (A) with a tax rate of 0% should be used.

Examples of transactions that are GST Free

•Food (coffee, tea, sugar etc)

•Sewerage and water rates

•Donations

•Stamp Duty

•Most education and health services

•Bank Charges and bank account keeping fees

•Interest income and expense

•ASIC fees

•Motor Vehicle registration

It is very important to note that GST-free supplies are to be shown on the BAS as ‘GST Free Purchases’, i.e. they are reportable.

 

N – Non-Taxable

Some transactions fall outside the GST net, i.e. they do not attract GST. In most cases these transactions are not sales nor ‘purchases’. In such cases, 'Non-Taxable' tax code (N) with a tax rate of 0% should be used.

Examples of transactions that fall outside the GST net

•Most internal transactions within a business fall outside the GST net, i.e. there is no GST added to them.

•Cash transfers, bank transfers, re-imbursements

•Depreciation

•Superannuation payments

•Loan and clearing account transactions

•Salary and Wage payments

It is very important to note that these transactions are NOT to be shown on the BAS as ‘GST Free Purchases’, i.e. they are NOT reportable.

 

S - GST 10% Fixed Asset Sales and Purchases

Same as tax code 'T' however it reports on G10 Capital Purchases on your BAS. Capital purchases are 'capital' items you purchase, including:

•Machinery

•Cash registers

•Computers

•Cars

These items are also referred to as plant and equipment

•Land and buildings

These assets can be brand new or second-hand, and may be imported.

 

X - GST Exempt

•Imports and other expenses/purchases outside of Australia