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    <title>Setting up tax codes</title>
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      <div class="WebWorks_Breadcrumbs" style="text-align: left;">
        <a class="WebWorks_Breadcrumb_Link" href="lists.12.1.htm#1087269">Lists</a> &gt; Setting up tax codes</div>
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      <blockquote>
        <div class="hs_SectionHeading"><a name="1087269">Setting up tax codes</a></div>
        <div class="b_Body"><a name="1087270">Tax codes are used to track tax paid to and by your business. Each </a>tax code represents a particular type of tax.</div>
        <div class="b_Body"><a name="1104323">Your MYOB software has an extensive list of tax codes that can be </a>used in a variety of situations—for example, when doing business with overseas customers, when tracking capital acquisitions and so on.</div>
        <div class="hp_ProcedureHeading" onclick="WebWorks_ToggleDIV(WebWorksRootPath, &quot;wwdd1112347&quot;);">
          <span class="N_007eProcBullet"></span><a name="1112347">Summary of tax types</a><script type="text/javascript" language="JavaScript1.2">WebWorks_WriteArrow(WebWorksRootPath, "wwdd1112347", false);</script></div>
        <script type="text/javascript" language="JavaScript1.2">WebWorks_WriteDIVOpen("wwdd1112347", false);</script>
        <div class="b_Body"><a name="1112348">When you create a tax code, you need to select which type of tax </a>it is. There are eight tax types you can choose from. The table below describes what each tax type is for.</div>
        <div class="ta_TableAnchorPara"><a name="1112390">&nbsp;</a></div>
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              <div class="tch_TableColHeading"><a name="1112351">Tax Type</a></div>
            </td>
            <td style="background-color: WhiteSmoke; border-bottom-color: Gray; border-bottom-style: solid; border-bottom-width: 1pt; border-top-color: Gray; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top; width: 189.409039370079pt;">
              <div class="tch_TableColHeading"><a name="1112353">Description</a></div>
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            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="trh_TableRowHeading"><a name="1112355">Consolidated</a></div>
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            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="t_TableBody"><a name="1112357">This tax type is used for taxes that are made up of </a>two or more tax codes or sub-taxes. </div>
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              <div class="trh_TableRowHeading"><a name="1112362">Import Duty</a></div>
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            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="t_TableBody"><a name="1112364">Importers, who are bringing goods into Australia </a>from other countries, should use this tax type. Tax codes with this tax type are used to record the import duty payable on a purchase order without changing the total amount of the purchase order. (The import duty is treated as a separate transaction since the duty is payable to the ATO, not to the company supplying the goods.)</div>
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              <div class="trh_TableRowHeading"><a name="1112366">Sales Tax</a></div>
            </td>
            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="t_TableBody"><a name="1112368">This tax type is associated with the Wine Equalisation </a>Tax.</div>
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            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="trh_TableRowHeading"><a name="1112370">Goods &amp; </a>Services Tax</div>
            </td>
            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="t_TableBody"><a name="1112372">This tax type is associated with the Goods &amp; Services </a>Tax assigned to sales and purchases. This tax type also is used for GST free goods and GST on Wine Equalisation Tax.</div>
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            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="trh_TableRowHeading"><a name="1112374">Input Taxed </a>tax type</div>
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            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="t_TableBody"><a name="1112376">This tax type should be used by organisations, such </a>as suppliers of financial services, that must pay GST on the purchases they make but don't collect GST from their clients or customers. The Input Taxed tax type also should be used by businesses that haven't registered for GST (businesses with turnover of less than $50,000 annually).</div>
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              <div class="trh_TableRowHeading"><a name="1112378">Luxury Car </a>Tax</div>
            </td>
            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="t_TableBody"><a name="1112380">This tax type is used by the Automotive industry to </a>handle the luxury car tax.</div>
            </td>
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            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="trh_TableRowHeading"><a name="1112382">Voluntary </a>withholdings</div>
            </td>
            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="t_TableBody"><a name="1112384">This tax type should be used for the PAYG voluntary </a>withholdings scheme.</div>
            </td>
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            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="trh_TableRowHeading"><a name="1112386">No ABN/TFN</a></div>
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            <td style="background-color: WhiteSmoke; border-bottom-color: White; border-bottom-style: solid; border-bottom-width: 1pt; border-left-color: White; border-right-color: White; border-top-color: White; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="t_TableBody"><a name="1112388">This tax type should be used for suppliers that have </a>not quoted ABNs on their invoices, or for amounts that are withheld from investment income because no tax file number was quoted. This type indicates that the tax code is a PAYG Withholding tax type and will always be rounded down to the nearest dollar.</div>
              <div class="t_TableBody"><a name="1112389">You should use a No ABN/TFN tax code of 48.5% for </a>suppliers who do not quote an ABN on invoices for more than $50 tax exclusive, or where amounts are withheld from investment income because no tax file number was quoted. If both of these situations apply to your company, you will need to create two tax codes to handle them separately.</div>
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        </table>
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        <div class="hp_ProcedureHeading" onclick="WebWorks_ToggleDIV(WebWorksRootPath, &quot;wwdd1087273&quot;);">
          <span class="N_007eProcBullet"></span><a name="1087273">To create a tax code</a><script type="text/javascript" language="JavaScript1.2">WebWorks_WriteArrow(WebWorksRootPath, "wwdd1087273", false);</script></div>
        <script type="text/javascript" language="JavaScript1.2">WebWorks_WriteDIVOpen("wwdd1087273", false);</script>
        <div class="bs_BodyStep_outer" style="margin-left: 0pt;">
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                <div class="bs_BodyStep_inner" style="width: 14.1732283464567pt; white-space: nowrap;">
                  <span class="N_007eStepNum">1	</span>
                </div>
              </td>
              <td width="100%">
                <div class="bs_BodyStep_inner"><a name="1087274">Go to the </a><span class="w_Widgets">Lists</span> menu and choose <span class="w_Widgets">Tax Codes</span>. A list of tax codes appears. </div>
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                <div class="bs_BodyStep_inner" style="width: 14.1732283464567pt; white-space: nowrap;">
                  <span class="N_007eStepNum">2	</span>
                </div>
              </td>
              <td width="100%">
                <div class="bs_BodyStep_inner"><a name="1087275">Click </a><span class="w_Widgets">New</span>. The <span class="w_Widgets">Tax Code Information</span> window appears. </div>
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        <div class="bs_BodyStep_outer" style="margin-left: 0pt;">
          <table border="0" cellspacing="0" cellpadding="0" summary="">
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                <div class="bs_BodyStep_inner" style="width: 14.1732283464567pt; white-space: nowrap;">
                  <span class="N_007eStepNum">3	</span>
                </div>
              </td>
              <td width="100%">
                <div class="bs_BodyStep_inner"><a name="1087276">In the </a><span class="w_Widgets">Tax Code</span> field, type a code (up to three characters) for the new tax and press <span class="k_Keys">Tab</span>.</div>
              </td>
            </tr>
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        <div class="bs_BodyStep_outer" style="margin-left: 0pt;">
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                <div class="bs_BodyStep_inner" style="width: 14.1732283464567pt; white-space: nowrap;">
                  <span class="N_007eStepNum">4	</span>
                </div>
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              <td width="100%">
                <div class="bs_BodyStep_inner"><a name="1087331">Complete the other fields in this window. </a></div>
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          <caption style="caption-side: top"></caption>
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              <div class="gc_GraphicsHolderCell"><a name="1087299"><img id="1114989" class="Default" src="images/lists.12.4.1.png" width="397" height="280" style="display: inline; float: none; left: 0.0; text-align: center; top: 0.0;" /></a></div>
            </td>
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            <td style="background-color: White; border-bottom-color: Gainsboro; border-bottom-style: solid; border-bottom-width: 1pt; border-top-color: Gainsboro; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="trh_TableRowHeading"><a name="1087320">A</a></div>
            </td>
            <td style="background-color: White; border-bottom-color: Gainsboro; border-bottom-style: solid; border-bottom-width: 1pt; border-top-color: Gainsboro; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="t_TableBody"><a name="1087322">Enter a description, type and rate. If you selected </a><span class="w_Widgets">Consolidated</span> as the <span class="w_Widgets">Tax Type</span>, see ’Consolidated tax codes’ below.</div>
            </td>
          </tr>
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            <td style="background-color: White; border-bottom-color: Gainsboro; border-bottom-style: solid; border-bottom-width: 1pt; border-top-color: Gainsboro; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="trh_TableRowHeading"><a name="1087327">B</a></div>
            </td>
            <td style="background-color: White; border-bottom-color: Gainsboro; border-bottom-style: solid; border-bottom-width: 1pt; border-top-color: Gainsboro; border-top-style: solid; border-top-width: 1pt; padding-bottom: 4pt; padding-left: 6pt; padding-right: 10pt; padding-top: 4pt; vertical-align: top;">
              <div class="t_TableBody"><a name="1087329">Select the linked account for tax collected and for tax paid. </a>These fields are only available for some tax types. </div>
            </td>
          </tr>
        </table>
        <div class="b_Body"><a name="1115774">&nbsp;</a></div>
        <script type="text/javascript" language="JavaScript1.2">WebWorks_WriteDIVClose();</script>
        <div class="hp_ProcedureHeading" onclick="WebWorks_ToggleDIV(WebWorksRootPath, &quot;wwdd1087333&quot;);">
          <span class="N_007eProcBullet"></span><a name="1087333">Consolidated tax codes</a><script type="text/javascript" language="JavaScript1.2">WebWorks_WriteArrow(WebWorksRootPath, "wwdd1087333", false);</script></div>
        <script type="text/javascript" language="JavaScript1.2">WebWorks_WriteDIVOpen("wwdd1087333", false);</script>
        <div class="b_Body"><a name="1087334">You can create consolidated tax codes by combining two or more </a>tax codes. For example, you could create a GW tax code (with a 41.9% tax rate) that is composed of WET (Wine Equalisation Tax) at 29% and WEG (GST on Wine Equalisation Tax) at 12.9%.</div>
        <div class="bnF_NoteHeadingFirst">
          <span class="N_007eNoteCautionWarning">note : </span><a name="1087342">You can only consolidate tax codes that are in your tax </a>code list</div>
        <div class="bnL_NoteBodyLast"><a name="1087343">Make sure you first create the tax codes you want to </a>consolidate.<span class="w_Widgets"> </span>The rest of the fields are filled in for you and the consolidated tax rate is calculated automatically.</div>
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        <div class="hp_ProcedureHeading" onclick="WebWorks_ToggleDIV(WebWorksRootPath, &quot;wwdd1087345&quot;);">
          <span class="N_007eProcBullet"></span><a name="1087345">To assign tax codes to accounts</a><script type="text/javascript" language="JavaScript1.2">WebWorks_WriteArrow(WebWorksRootPath, "wwdd1087345", false);</script></div>
        <script type="text/javascript" language="JavaScript1.2">WebWorks_WriteDIVOpen("wwdd1087345", false);</script>
        <div class="b_Body"><a name="1087346">You can assign a tax code to any detail account in your accounts </a>list. The tax code you assign will appear as the default tax code in a transaction where you allocate a deposit, cheque, or a non-item sale or purchase to this account.</div>
        <div class="b_Body"><a name="1087347">For example, you have assigned the GST tax code to your </a>electricity expense account. When you write a cheque to settle your electricity bill in the <span class="w_Widgets">Spend Money</span> window, and allocate it to this account, the GST tax code will appear in this window by default. </div>
        <div class="b_Body"><a name="1087348">You can allocate a tax code to an account in the </a><span class="w_Widgets">Edit Accounts</span> window. To open this window, go to the <span class="w_Widgets">Accounts</span> command centre, click <span class="w_Widgets">Accounts List</span>, double-click the required account, and click the <span class="w_Widgets">Details</span> tab.</div>
        <div class="b_Body"><a name="1115780">&nbsp;</a></div>
        <script type="text/javascript" language="JavaScript1.2">WebWorks_WriteDIVClose();</script>
        <div class="hp_ProcedureHeading" onclick="WebWorks_ToggleDIV(WebWorksRootPath, &quot;wwdd1087364&quot;);">
          <span class="N_007eProcBullet"></span><a name="1087364">To assign tax codes to items</a><script type="text/javascript" language="JavaScript1.2">WebWorks_WriteArrow(WebWorksRootPath, "wwdd1087364", false);</script></div>
        <script type="text/javascript" language="JavaScript1.2">WebWorks_WriteDIVOpen("wwdd1087364", false);</script>
        <div class="b_Body"><a name="1087365">When you set up your items, you must assign a tax code to each </a>of them.</div>
        <div class="b_Body"><a name="1087366">You can assign a tax code to be used when you sell an item and a </a>tax code to be used when you buy an item. That tax code will appear as the default in sales and purchases of that item <span style="font-style: italic;">unless</span> you have specified that the customer’s or supplier’s tax code to be used instead.</div>
        <div class="b_Body"><a name="1087370">Tax codes are assigned to items in the </a><span class="w_Widgets">Buying</span> and <span class="w_Widgets">Selling</span> tabs of the <span class="w_Widgets">Item Information</span> window. For more information, see <span class="l_Link"><a href="inventory.10.2.htm#1106276">Creating items</a></span>.</div>
        <script type="text/javascript" language="JavaScript1.2">WebWorks_WriteDIVClose();</script>
        <div class="hp_ProcedureHeading" style="margin-bottom: 4.0pt; margin-top: 8.0pt;" onclick="WebWorks_ToggleDIV(WebWorksRootPath, &quot;wwdd1087376&quot;);">
          <span class="N_007eProcBullet"></span><a name="1087376">To assign tax codes to cards</a><script type="text/javascript" language="JavaScript1.2">WebWorks_WriteArrow(WebWorksRootPath, "wwdd1087376", false);</script></div>
        <script type="text/javascript" language="JavaScript1.2">WebWorks_WriteDIVOpen("wwdd1087376", false);</script>
        <div class="b_Body"><a name="1087377">You can define a default tax code for a customer or supplier. You </a>would only need to select a default tax code if the customer’s or supplier’s tax status takes precedence over that of the item or service being sold or purchased. </div>
        <div class="b_Body"><a name="1087378">For example, if a customer is one to whom you only ever make </a>export sales, you should assign the EXP (Export Sales) tax code to that customer’s card.</div>
        <div class="b_Body"><a name="1087379">When you create a quote, order or invoice, the tax code assigned </a>to the customer will be used as the default. This tax code will override the item’s tax code in an item sale, and the allocation account’s tax code in a non-item sale. </div>
        <div class="b_Body"><a name="1094726">Tax codes are assigned to customers in the </a><span class="w_Widgets">Selling Details</span> tab of their <span class="w_Widgets">Card Information</span> window.</div>
        <div class="b_Body"><a name="1113949">Make sure you select the </a><span class="w_Widgets">Use Customer’s Tax Code</span> option. (If this is not selected, the customer’s tax code will not be used, even if one has been assigned.)</div>
        <div class="b_Body"><a name="1113955">Similarly, when you create a quote, order or bill, the tax code </a>assigned to the supplier will be used as the default. This tax code will override the item’s tax code in an item purchase and the allocation account’s tax code in a non-item purchase. Tax codes are assigned to suppliers in the <span class="w_Widgets">Buying Details</span> tab of their <span class="w_Widgets">Card </span><span class="w_Widgets">Information</span> window. </div>
        <div class="b_Body"><a name="1113904">Make sure you select the </a><span class="w_Widgets">Use Supplier’s Tax Code</span> option. (If this option is not selected, the supplier’s tax code will not be used, even if one has been assigned.)</div>
        <script type="text/javascript" language="JavaScript1.2">WebWorks_WriteDIVClose();</script>
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