Tag Archives: GST

GST on imported goods

Software: MoneyWorks accounting software

Oversea suppliers are not supposed to charge GST if they are not a GST registered trader. The GST is paid to the Custom or a forwarder (if they paid the GST on your behalf) when goods arrived.

You can use the cost of goods sold or an expense account as a dummy account in the account tab of a payment transaction to record the GST paid. For example, you paid $700 GST on goods purchased; the entry will be:

Detail line 1:
Account: Cost of Goods Sold
Taxable amount: 10,000
Tax Code: IM
GST: 700

Detail line 2:
Account: Cost of Goods Sold
Taxable amount: -10,000 (negative)
Tax Code: OP (or *)
GST: 0

Imported GST

The Cost of Goods Sold contra off with each other and left the GST paid.

Due to differences between the internal exchange rate and the rate used by the Custom, the taxable amount could be different from the purchase value in Singapore dollar.

Note: You are supposed to record the import permit number in either Transaction user field 1, 2, or 3 on both purchase invoice and the GST payment, which will use in the IAF (Iras Audit File) report later if required. The Transaction User field label can be renamed to ‘Permit No’ from the Document Preferences to ease the data entry.

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QuickBooks foreign currency transaction

Software: Intuit Quickbooks Desktop accounting system

In QuickBooks, only bank, accounts receivable, accounts payable, and the credit card accounts have the multiple currencies option.

After turning on the multiple currencies feature in QuickBooks, you have to set the trading currency in each debtor or creditor profile. So, the related transaction will record in foreign currency.

QuickBooks multiple currency

By default, the foreign currency transaction will pick up the exchange rate from the currency table; however, you can change the exchange rate to match the GST in Singapore dollar which shows on the foreign currency bill.

Local Supplier who billed you in foreign currency has to show the amount before GST, GST, and the amount inclusive of GST in Singapore dollar equivalent. You have to follow the exchange rate shown on the bill instead of the system exchange rate, so to claim the input tax correctly.

For example, your system exchange rate is 1USD:1.3500SGD. You received a US dollar bill from a local supplier shows a GST of US$700 (S$947.10 Singapore dollar equivalent). Then, you record the bill at 1USD:1.3530SGD instead of the system exchange rate. It affects the GST amount in Singapore dollar if using the system exchange rate instead.

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Show Tax column in invoice transaction

Software: MoneyWorks #accounting software
By default, MoneyWorks does not show the tax column in transactions windows such as Sales Invoice and Purchase Invoice. When recording a transaction, you just need to select the tax code and let MoneyWorks do the tax calculation automatically.

However, due to rounding differences, the GST amount on the bill you received may be different from your entry. To adjust the GST amount, you need to turn on the “Show Tax Column” from the Document Preferences, then amend the tax amount in the transaction according to the bill received.

show-tax-column

You will get a warning message that the GST report contains anomalous transactions if there is any incorrect GST amount for the tax code.