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Alana3's avatar
Alana3
User
7 months ago
Solved

Tax Code

Should I still use "cap" as tax code if purchasing a furniture if it's eligle for Instant Asset Write off because it's below 1,000 or shall I use "gst"? Thank you.

  • Freman's avatar
    Freman
    7 months ago

    Earl_HD 

     

    "Using the "GST" tax code implies that Goods and Services Tax is applicable to the purchase. However, when an asset is eligible for the Instant Asset Write-Off, it's typically excluded from GST calculations."

     

    Earl, your response is quite misleading, it implies there is no GST to claim ('Typically Excluded') on assets elligible for instant asset write offs.  If you meant that the initial purchase is not excluded (ie you do claim the GST) and the subsiquent write off claim is then excluded, then you should have stated this.

     

    Alana3 

     

    Since the ATO simplified the BASs GST section to require just G1, 1A & 1B (ie we are not reporting any info about purchases at all other than the GST paid). There is now no need to use the old 'CAP' tax codes, you can use 'GST' tax code  instead. You can continue to use CAP of course & its only real benefit is for you own internal reporting.

    Myself being old school and having been using & supporting MYOB since 1990/1991  I still use CAP tax codes to this day but its nothing more than a habit, its usefulness is next to nothing these days. (I'll break this habit one day I keep promising myself LOL)

     

     

     

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  • Earl_HD's avatar
    Earl_HD
    MYOB Moderator
    7 months ago

    Hi Alana3,

    Thank you so much for your post and welcome to the Community Forum!

    In a situation like this, it's always a good practice to consider consulting with a tax advisor or accountant. They can provide guidance to ensure that you're applying the correct tax treatment for your particular circumstance.
     

    Using the "GST" tax code implies that Goods and Services Tax is applicable to the purchase. However, when an asset is eligible for the Instant Asset Write-Off, it's typically excluded from GST calculations.

    Feel free to post again, we're happy to help!
    Regards,
    Earl

    • Freman's avatar
      Freman
      Trusted Partner
      7 months ago

      Earl_HD 

       

      "Using the "GST" tax code implies that Goods and Services Tax is applicable to the purchase. However, when an asset is eligible for the Instant Asset Write-Off, it's typically excluded from GST calculations."

       

      Earl, your response is quite misleading, it implies there is no GST to claim ('Typically Excluded') on assets elligible for instant asset write offs.  If you meant that the initial purchase is not excluded (ie you do claim the GST) and the subsiquent write off claim is then excluded, then you should have stated this.

       

      Alana3 

       

      Since the ATO simplified the BASs GST section to require just G1, 1A & 1B (ie we are not reporting any info about purchases at all other than the GST paid). There is now no need to use the old 'CAP' tax codes, you can use 'GST' tax code  instead. You can continue to use CAP of course & its only real benefit is for you own internal reporting.

      Myself being old school and having been using & supporting MYOB since 1990/1991  I still use CAP tax codes to this day but its nothing more than a habit, its usefulness is next to nothing these days. (I'll break this habit one day I keep promising myself LOL)