An introduction to BAS - What is it? The way it works?
It is common knowledge that a business registering for GST must lodge a BAS (business activity statement), but what exactly is a BAS, and what are the taxes it includes? Now that we have discussed these questions, let's dig deeper into the matter.
BAS Statement -
Introduce in 2000 BAS is a form that a GST-registered firm submits to ATO ( Australian Taxation Office ). When a business registered for ABN ( Australian Business Number ) and GST to ATO, ATO automatically send them BAS. ATO can send BAS in different forms such as Paper forms, electronically, or through the company’s registered BAS agent.
How can one lodge tax / Ways to lodge your BAS -
Large Business — Those who run a large business and want to lodge online can use ATO Business Portals to fill out their BAS Lodgement.
Sole Trader — Those who own a sole trading business can fill BAS Lodgement online from the MyGov website.
Others — Those who want to fill BAS Lodgement directly from accounting and payroll software can use SBR Enabled Software.
The statement includes BAS
GST
PAYG
FBT
WET
In Australia, GST (Goods and Services Tax) imposes a tax on many items and services that are sold or consumed. The tax rate is 10%. It was introduced on 1 July 2000 and took place of the previous tax which is the federal wholesale sales tax.
If the entity that prepares a quarterly BAS is not registered with GST can apply for IAS ( Instalment Activity Statement ).
PAYG ( Pay as you go )Tax — PayG Income tax help to keep cash flow statement and to avoid large tax bill after income tax lodgement. It includes PAYG Instalments and PAYG Withholding.
Difference Between PAYG Instalment and PAYG Withholding
PAYG Instalments — PAYG Instalments are pre-payment that a firm made in financial year income tax.
PAYG Withholding — A company paying its employees to withhold some amount of tax from their salaries and submit it to ATO. At the end of the financial year, employees can submit claims for reimbursement.
FBT ( Fringe Benefit Tax ) — Many companies give fringe benefits to their employees. Employee fringe benefits are taxed by employers. Based on the taxable value of fringe benefits, it is calculated. A third party can provide benefits to a third party under an arrangement with the employer and include the FBT in BAS.
WET ( Wine Equalisation Tax ) — If a person makes wine imported into Australia or sells it one is liable for wine equalization tax at the tax rate of 29% of the wholesale value of wine. WET paid on the last wholesale sale of wine. One can add BAS Statement in the case when it may apply to the situation of cellar door sales or tasting where there is no wholesale.
Final Words
Now with the above-mentioned list of taxes that are included in BAS. One can easily file BAS on time. In Australia, all are compliant with the guideline of ATO. As there are many documents there are chances of inaccuracy in some of the documents that can wreck the company picture so one should go for professional assistance for the accurate compliment of BAS.