Many (but not all!) fees you pay that are associated with your bank like ATM fees, monthly account fees, or interest on your loans and credit cards do not include GST.
Why? Because most bank fees are input-taxed. If you have no idea what that means, don’t fret – you’re not alone, this isn’t everyday jargon we’re playing with here.
Input-taxed fees mean a business or corporation cannot charge GST on fees, goods, or services, or claim GST back on their own business purchases.
In the instance of banks, that’s because these kinds of payments are taxed as financial supplies (something we all need as a way to organise our funds and finances), and most financial supplies are input-taxed and exempt from GST.
What is GST?
Goods and Services Tax is tacked onto most goods, services, or products that you buy and included in the total cost you pay. The individual or business who is supplying you with said goods, services, or products is required to charge an extra 10% of their set price or rate as GST, which they then forward on to the ATO.
If you’re someone who charges people for a service or product, you are required to be registered for GST if you are set to earn $75,000 and over in business income in the next 12 months. If you don’t need to register for GST? No dramas, if you don’t register, you can’t charge GST and you can’t claim GST back.
GST can be claimed if there is a difference between the amount collected and the amount you paid (kind of like if you overpaid on your income tax, you would receive the difference between what you paid and what you owed back in your bank account).
What other products are GST-exempt?
So, we covered bank fees as an item that’s GST exempt, but what else? The other main items in this category are things like food, health, international travel, exports and some charitable activities. Plus, everything at the duty-free section of the airport. Why buy one giant toblerone when you can buy two?
Honestly though, we understand GST can feel like a bit of a minefield, so we’ve actually pre-prepared a more detailed guide for you. We also have a guide walking you through preparing a Business Activity Statement (BAS), which is how you report on and forward GST payments.
Don’t say we never give you any presents!
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