Tag Archives: GST

How to change the tax code (GST code) in a transaction?

When entering a transaction (e.g. a purchase invoice) in MoneyWorks, the tax code used in the detail line follows the tax code set in the account used. For example, the transaction tax code will be OP (Out-of-Scope) if the tax code for the account (e.g. prepayment account) is OP tax code.

You can change the tax code (under the TC column) when entering the transaction, such as changing OP to G tax code (except * tax code). Usually, non-taxable account such as the bank, shareholder funds, accounts receivable and accounts payable use * tax code. If you have an account with a * tax code in a transaction and wish to change, you got to do it at the account level instead (From the accounts list, highlight the account you want to amend and click on the Modify button to edit the tax code).

Change GST code
Change tax code (GST code)

Override tax code

If there is any tax code set in the name profile (Supplier or customer), the tax code set in the name profile will override the tax code in the account. Assuming the tax code for the prepayment account is OP, and the tax code in the supplier is G tax code. When entering a transaction for the supplier with the prepayment account, MoneyWorks will pick up the G tax code instead of OP to calculate the GST (Goods and Services Tax).

Override GST code
Override tax code (GST code)

Override tax code helps speed up data entry and reduce entry errors. For example, you have tagged the G tax code (standard rate GST) for the revenue account, and the export customer has a Z tax code (zero-rated GST). The invoice will remain as G tax code for the local customer but change to Z tax code when invoicing the export customer.

The list of tax codes is available in MoneyWorks’ tax rate table (access from the Show menu).

**Please refer to the IRAS GST e-tax guide for more information.

How to change the tax rate in MoneyWorks when the GST rate increase from 7% to 8%?

Singapore is increasing the standard rated GST from 7% to 8% on 1 January 2023 and 8% to 9% from 1 January 2024.

The current standard rated GST (G GST code) rate set in MoneyWorks is 7%, pre-loaded when you first created the document (the company file) with localisation setup as Singapore. You need to update the tax rate for the standard rated GST code to facilitate the rate change on 1 January 2023. 

How to change?

First, launch MoneyWorks accounting software with the document you wish to edit. Then, go to the Show menu and click on Tax Rates. Highlight the tax code (e.g. G GST code) from the Tax Rates windows and click on the Modify button to edit the tax code. Under the Percentage Rate section:

if your current setting is:

  • Rate1: blank
  • Changeover date: blank
  • Rate2: 7.00% (current GST rate)

then, change it to:

  • Rate1: Enter 7.00% (this is the existing rate)
  • Changeover date: enter 1 January 2023
  • Rate2: Enter 8.00% (this will be the new tax rate)
Edit GST rate
Edit GST Rate

That’s it! You have completed the rate change.

Transactions you entered with a standard rated GST (G GST code), with a transaction dated on and after 1 January 2023, will pick up 8%. Whereas transactions dated before 1 January 2023 will be using the old 7% rate.

The tax rate setting is on a per document (company file) basis. You have to go through the process of each company file if you have more than one document.

You may consider engaging a MoneyWorks consultant to make the necessary changes for you and check through the customised forms, reports, import maps, and scripts to ensure the tax rate and tax amount captures correctly. 

Amending GST amount on Purchase Invoice

Software: MoneyWorks accounting software

There are two methods of computing the GST on Tax Invoice when the invoice contains more than one item with the standard rated supplies. The line item method, which commonly used in accounting software; this method computes the GST on each line item and then sums up the GST amount. The second is a subtotal method, which calculates GST based on the total payable.

Document Preferences

Assuming you sold 9 pieces of product A at $13.98 each and 7 pieces of product B at $17.38 each.

Method one (the line item method):

9 x Product A @$13.98 = $125.82 x 7% GST = $8.80
7 x Product B @$17.38 = $121.66 x 7% GST = $8.51
Total GST = $17.31

Method two (Subtotal method):

9 x Product A @$13.98 = $125.82
7 x Product B @$17.38 = $121.66
Subtotal: $247.48
7% GST = $247.48 x 7% = $17.32

Amend GST

Both methods of computing the total GST are acceptable so long as you apply the chosen method consistently.

IRAS Calculating GST on invoice

Due to a different method used or rounding between two systems, the GST amount on supplier invoice may differ from your entry. You need to set to show tax column from the MoneyWorks Document Preferences to allow amending the GST amount on Purchase Invoice transaction. A warning message may prompt when printing the GST report, and the report highlights those transactions in question.

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