Understanding goods and services tax

 

When registering a business in Australia, you would need to think about the types of taxes that would apply to your business. Many business owners are confused about which taxes they should pay and when they should pay them. Goods and Services Tax (GST) is one of those taxes that can be confusing for some business owners — especially for first-time business owners.

What is Good and Services Tax

Goods and Services Tax (GST) is a 10% value-added tax placed on most services and goods sold within the country. We say most, as there are some exceptions, such as select housing and health items, and particular food. Some long-term accommodation may also be exempted and may only be taxed at 5.5%.

If you’ve registered your business for GST, you should include it in the price you charge for your goods or services. You can also claim GST credits for applicable goods and services you purchase for your business.

Why Is It Important to Know

Understanding GST helps you decide whether it’s time for your business to register for it or not. Additionally, it will help you determine when to charge for GST and when you shouldn’t.

Some GST-free products and services are:

  • Basic food
  • Select medicines
  • Select childcare services
  • Select health care and medical services
  • Select medical appliances and aids
  • Select charitable and religious activities
  • Accommodation, meals, and supplies of those living in retirement villages by select operators

Should Your Business Register for GST?

Not all businesses or organisations need to register for GST. Businesses with a GST turnover of at least $75,000 must register. For non-profit organisations, you would only need to register if your GST turnover is at least $150,000.

Businesses offering limousine or taxi travel like OLA, DiDi, and Uber must register for GST, regardless of their GST turnover.

Do you want to claim fuel tax credits? Consider registering your business for GST regardless of your GST turnover.

How to Register for GST

Do you already have an Australian Business Number (ABN)? If yes, we are able to register your business for GST.

If you do not have an ABN yet, you can register for ABN and GST simultaneously.

Once your business is registered for GST, you would need to provide tax invoices specifying the invoice total and GST component. Additionally, you must obtain tax invoices for purchases made for your business so you can claim GST credits. A robust accounting software should be maintained for this purpose.

Lodgement & Payment Requirements

On a monthly, quarterly or annual basis, your net GST payable or receivable figure would need to be calculated, reported and lodged via a Business Activity Statement. Lodgement and payment (if applicable) would be due within certain deadlines depending on the BAS (Business Activity Statement) cycle your business is on.

GST does not have to be complicated. Let us assist in managing your GST obligations. Call us at 03 9885 9793 or email enquiries@glanceconsultants.com.au to see how we can help you.

Tax Considerations for Rental House

Investment property income you get from your property is considered by the Australian Taxation Office to be taxable income. It is taxed according to your marginal tax rate, and it should be declared on your income tax return.

With that said, it is essential to consider what are the critical tax considerations for your investment property in Australia. Here are some of them:

– Deductions

According to the ATO, investment property expenses can be considered as a tax deduction if they are connected to the investment property. Therefore, the management and the maintenance expenses you pay will offset any taxable income.

Some examples of what can be considered a deduction on investment properties are expenses on the advertisement in relation to advertising for new tenants, interest expenses on your investment property loan, landlord insurance, repairs & maintenance, depreciation, agent fees, mortgage insurance etc. Make it a habit to always keep your receipts for these expenses.

– Property Tax

You will also need to pay for separate property taxes such as council and water rates. These taxes are paid to the local government for activities such as public maintenance and rubbish collection. This tax is calculated based on the value of your property and its location.

– Land Tax

Land tax is calculated using the land value of your property and is paid to your state government.


Final Word

Owning an investment property and receiving rental income is a great investment option, but it also requires you to consider the income considerations. Hopefully, the considerations mentioned above will help you get a better idea of what to expect and how to legally minimize your taxes.

Talking about your tax implications can be quite overwhelming and sometimes confusing for many. If you have any questions, Glance Consultants will be happy to assist you.

Please fill out our contact form or call us at 03 9885 9793.

How an Audit for a Superannuation Fund works

The superannuation fund is an adaptation made by the Government of Australia to motivate its citizens to accumulate funds that will provide them with a stream of income in their retirement years. The state does this by making it compulsory for employers to contribute superannuation on top of their employees’ salaries and wages. They also provide tax benefits for further encouragement. 

If you have a superannuation fund, you need to know that it should have a mandatory audit done by an auditor accredited by the Australian Securities and Investment Commission. The audit will include a Financial Report Audit and a Compliance report audit. 

 

Financial Report Audit

The following are the primary requirement to get a financial Report Audit:

● An audit engagement letter signed by the trustees

● Trustee representation letter which is signed

● Financial accounting reports, such as member statements, income statements, balance sheets, etc. 

● Duly accomplished annual tax return

● Supporting documents

 

Compliance Audit Report

Here are the documents needed for the Compliance audit report

● A signed copy of pension documentation if it is in pension mode

● Permanent files copies

● Actuarial Certificate

● Life insurance certificate (if applicable)

● ASIC annual return if employers are acting fund trustees

Once the auditor receives the files mentioned above, they will proceed with their auditing task. If there are breaches, auditors will try their best to rectify the matter legally. 

 

Final Word

When getting an auditor who will be in charge of auditing your superannuation fund, make sure that ASIC accredits them. You can check their legitimacy by going to the website and confirming their registration. 

If you have more questions that are not covered by this article, kindly fill out our contact form or call us at 03 9885 9793.

We will help you and assist you with your superannuation fund concerns and enquiries. 

Are Cryptocurrencies Subject to Tax? It Depends on What Happens

Are Cryptocurrencies subject to tax? It depends on what happens.

Recently, the cryptocurrency has been discussed in Australia with the ATO implementing new measures to get cryptocurrency users to pay tax. This subject matter had raised many bags of dust, with people suggesting this deal won’t make it through. But it is clear now that you will be taxed for using your cryptocurrency. This article will discuss how you can handle these taxes.

 

Why are cryptocurrencies subject to tax?

For the Australian Tax Office (ATO), bitcoin and other forms of cryptocurrencies are not money, foreign, or Australian currency. Instead, cryptocurrencies are classified as property and an asset, which qualifies as taxable under capital gains tax. The everyday use of your bitcoin does not carry a tax obligation. However, your cryptocurrency is taxable when:

  1. You sell or gift your cryptocurrency
  2. Trade or exchange cryptocurrency for fiat currency or another cryptocurrency
  3. Convert your cryptocurrency to a fiat currency
  4. use your cryptocurrency to obtain goods and services, and so on.

 

Is your cryptocurrency taxable in the event of a hard fork?

In the event of a coin split or a hard fork, as it happened with the release of Bitcoin cash in August 2017, the tax liability imposed is of two kinds, namely:

  1. When cryptocurrency is held as an investment: in the event where you hold a coin as an investment, and there’s a hard fork or coin split, the ATO will only charge you capital gains when you chose to dispose of the new coins.
  2. Cryptocurrency held in business: when the cryptocurrency is contained in the industry, it is seen as trading stock; capital gains are charged on the coins when it is put out for sale.

 

Is a cryptocurrency trader taxable for his trades?

The ATO is specific on the tax liability of a cryptocurrency trader. The trader is taxable for capital gains as to the profits made from the trade; the trader can also deduct his losses.  

 

Cryptocurrency tax exemptions

The following are tax exemptions that are available to cryptocurrency users in Australia. 

  1. When cryptocurrency is used to make a purchase for goods and services for personal use
  2. When cryptocurrency is held for more than 12 months; the holder is eligible for a 50% capital gain tax.

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