Special rules apply to superannuation funds claiming GST on expenses. These can be complex. Trustees should seek expert advice, noting that, generally speaking, GST charges on fees for Accountancy, Taxation and Audit is not claimable.
The exemption is where those fees relate directly to administrative functions such as:
- maintaining member, employer and trustee records and associated accounting
- processing applications, contributions, benefits and distributions
- processing transfers between funds and trusts
- production and distribution of reports, forms and statements to members, employers and/or trustees
- handling inquiries and/or complaints from members
- costs for archiving storage and retrieval or record destruction
- processing and mailing statements
- compliance with industry regulatory requirements, excluding taxation and auditing services
Accountancy fees relating to the above may be more correctly classified as administration expenses.
Supplies of these services are classified as 'reduced input supplies' and 75% of the GST paid can be claimed.
GST on expenses relating to residential property will generally not be claimable.
Acquisitions relating to commercial property are taxable supplied and GST charged can be claimed in full.
If a Fund incurs expenses for, say, investment advice that relates partly to investing in commercial property and party to investing in shares and managed funds, it may be necessary to apportion the expense and claim 75% of the GST only on that portion of the expense that relates to advising on commercial property investment.
To correctly record GST on expenses, record the expense in the usual manner.
A GST Category field is now included on the Expense entry form. You will need to select the correct Category, and then Mclowd will calculate the GST amount to be claimed and record it in the GST Payable/Refundable Account in the General Ledger.
Total cost should always INCLUDE GST. Mclowd will calculate the amount of claimable GST included.