Over the last ten years, operating businesses in Australia under the Goods and Services Tax (GST) system has necessitated a profound understanding of Business Activity Statements (BAS) and their recurring reporting and compliance requirements among local business owners, their bookkeepers, and internal accounting teams. Alarmingly, a significant number of bookkeepers offering BAS services to small enterprises remain oblivious to the precise scope of their service offerings, particularly what they are prohibited from providing.
Many mistakenly assume that their sole responsibility is limited to data entry, exempting them from accountability for the Business Activity Statement. However, the BAS Service Legislation, enacted in March 2010, has altered this landscape, mandating that such service providers register as BAS Service Providers, thereby highlighting the need for compliance awareness beyond mere data entry.
Amplify Finance' expert tax accountants collaborate closely with your company's bookkeepers and internal accounting team to provide comprehensive GST-related services. They are equipped to address any queries or concerns you may have, ranging from Business Activity Statement (BAS) guidance to handling ATO reporting, GST-exempt transactions, BAS submissions, and resolving any disputes or conflicts that may arise. This integrated approach ensures that your business remains compliant with GST regulations while streamlining your tax management processes.
There is a commonly held misconception that GST applies to all sales and purchases, but in fact, there are numerous transactions and services that are exempt from GST. It is crucial for business owners to be aware of these GST exemptions to avoid paying unnecessary taxes or missing out on legitimate tax refunds. These GST exemptions can cover various areas such as real property transactions, childcare services, healthcare and medical fees, disability services, veterinary expenses, health insurance costs, registered training organizations, fresh (unprocessed) foods, food and food ingredients, beverages and beverage ingredients, export businesses, government grants, and input-taxed supplies.
There are also a limited number of supplies that are subject to input-taxation, meaning that when these supplies are made, GST cannot be charged, and any GST paid on related inputs cannot be claimed back. These input-taxed supplies include financial services, residential premises for rent, sales of residential premises (excluding new homes), food sold at school tuckshops (which may be optional), fundraising activities conducted by charities (which may also be optional), and certain transactions involving precious metals.
The taxation of real property transactions under GST laws can be a complex and often misunderstood area, with many individuals and businesses failing to apply GST correctly or including inadequate GST clauses in their real property contracts. While the sale of a private residence is generally exempt from GST, subdividing land can potentially be considered as conducting a business by the Australian Taxation Office (ATO). If this is the case, individuals or businesses with a GST turnover of 150,000 for non-profit organizations) are required to register for GST. Furthermore, proceeds from real property transactions may be included in calculating GST turnover, even if they are one-off or isolated transactions. However, residential premises are only exempt from GST when they are primarily used for residential purposes, and if a portion of the property is converted for commercial use, that part may be subject to GST.
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