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Tax Codes

Did the assignment of the Tax Codes make sense and how they affect the Tax Reports and the auto loading into transactions?

When creating a new Account or Product you must select a Tax Code for the account, this tax code will then auto load when creating transactions within ERP. It is important to ensure that the correct Tax Code is used as the entries made will automatically feed into the Tax report. If the tax codes are incorrect for an Account or Product this will affect the report.

• To access Tax Codes select the Accounts drop down menu at the top left of the main screen
• Select Tax Codes and then select Tax Code List
• A list of the Tax Codes are pre-configured in ERP Software. Some of these codes will never be used by the majority of businesses and are therefore Inactive by default but can be made Active if required.
• To Activate a tax code double click the required code then tick Active in the new window that opens and Save

N.B. the option Tax Code is also available here and is used to create a New Tax Code. Always consult your accountant and ERP Support before creating a new tax code as there may be implications for reporting.

The Tax Code List

ADJ Tax Adjustments

CAF Capital Acquisition - GST Free

CAG Capital Acquisition - Inc GST

CAI Capital Acquisition - for making Input Tax

E Tax Exempt

EXP GST Free Exports

FRE GST Free Supplies

GST Supplies Including GST

IMP Import Tax Code

INP Input Taxed Sales

NCF Non-Capital Acquisition - GST Free

NCG Non-Capital Acquisition - Inc GST

NCI Non-Capital Acquisition - for making Input Tax

NT No Tax

PRI Private No GST

Q Quoted

WC Combined WET and WEG

WEG GST on Wine Equalisation Tax

WET Wine Equalisation Tax

WGST GST on Wine Equalisation Tax

N.B. You should not replace any of the above codes as reports such as your BAS depend on the correct tax code being used.

What Tax Codes to Use

• WC, WEG and WGST These are only used by wine wholesalers. Wine Equalisation Tax is a value based tax on wine consumed in Australia. WET applies at 29% of the value of the wine at the last wholesale sale excluding GST.
• EXP EXP is only used for Export Sales and is used to populate Box G2 on the BAS. If you don't make export sales leave inactive
• E Used for acquisitions officially Exempt from GST eg. Bank Fees
• NT Any other transaction that is not subject to GST
• INP, CAI and NCI These are Input taxed supplies codes and are only applicable if your business has income streams from Residential Rentals, owns a Gold Mine, owns a Bank or provides Financial Supplies or runs a School Tuck Shop. Most businesses can leave these codes inactive. Otherwise use INP for income, CAI for capital purchases and NCI for non-capital purchses.
• GST and FRE These codes are used for sales. GST where GST is applicable which is most sales and FRE for GST free sales such as Medical Supplies and some Foods. Do not use these codes for purchases or your BAS report will not be accurate
• CAG and CAF These codes are for Capital Acquisitions. ie. Items that will be depreciated such as cars, furniture etc. Use CAG for acquisitions with GST Included and CAF for tax free acquisitions such as Water Rights and items purchased from a source not registered for GST.
• NCG and NCF These are used for non-capital acquisitions such as Inventory, Office supplies, Phones etc. NCG for acquisitions including tax (the majority of purchases) and NCF for acquisitions that are tax free such as Bank Charges and fees to contractors that are not registered for GST but have an ABN.