Does GST apply to bank fees? It depends...
The Goods and Services Tax (GST) is a consumption tax that is applied to most goods and services in Australia. The GST is calculated at a rate of 10% and is added to the price of goods and services. In this blog, we will explain how GST is applied to bank fees and how to account for it when completing your small business tax return.
Bank fees, such as monthly account fees, ATM fees, and credit card interest, are not subject to GST. These items are input-taxed as financial supplies, which means that your bank is not required to charge GST on these fees. As a result, you should not include a GST amount in your small business tax returns for these charges.
When it comes to calculating GST for bank fees in your BAS lodgment, you should not add any GST for bank fees. For example, if a bank charges a $10 per month account maintenance fee, you would only need to include the raw $10 as an expense. The BAS would just have $0 GST for these items.
There are some exceptions to this rule. Fees for services such as POS terminals, business insurance, or financial advice, can be subject to GST. So it’s important for businesses to keep receipts and accurate records of their fees and the GST charged on them. This will help you to calculate the GST correctly and ensure that you are complying with tax laws.
Thriday makes it easy to track your GST, as it automatically calculates the appropriate GST for any transactions processed through your Thriday Visa Debit card* or business bank account*. As a business owner, you want to ensure that you pay the right tax to avoid having any issues with the ATO.
To ensure you pay the right taxes, bank fees such as account maintenance fees, ATM fees, and credit card fees are not subject to GST. This means that businesses are not required to include GST on these fees when preparing a tax or BAS submission. As a business you should keep accurate records of your bank fees and use a platform like Thriday to ensure your data is accurate.
DISCLAIMER: Team Thrive Pty Ltd ABN 15 637 676 496 (Thriday) is an authorised representative (No.1297601) of Regional Australia Bank ABN 21 087 650 360 AFSL 241167 (Regional Australia Bank). Regional Australia Bank is the issuer of the transaction account and debit card available through Thriday. Any information provided by Thriday is general in nature and does not take into account your personal situation. You should consider whether Thriday is appropriate for you.
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