Special-GST Treatment: Non-deductible Expenditure: Difference between revisions

Latest revision as of 10:04, 13 April 2016

How to enter and to retrieve the non-deductible expenditure?

Introduction

This guide will teach you the way to key-in the data entry and help you to analyse the non-deductible expenditure related to GST. It is follow to the latest 2015 amendment in Income Tax Act 1967.

GST Expenditure (Effective from YA 2015)

1. para 39(1)(o): GST input tax paid or to be paid not allowed as deduction if:-

a. Non-registered person with turnover exceed GST threshold of Rm500,000.

b. Registered person fail to claim input tax credit his entitled to claim.

2. section 39(1)(p): Output tax absorbed by GST by registered person is not allowed as tax deduction.

3. GST block input tax & deductible expenses:-

Block Tax	GST input Tax	Tax deductible?
Passenger car (Cost and maintenance)	Blocked	Deductible (to claim capital allowance)
Club subscription fee	Blocked	Non-deductible
Medical insurance/personal accident insurance	Blocked	Deductible
Family benefits	Blocked	Depend (check with your auditors or tax consultant)
Entertainment expenses (Potential customer)	Blocked	Non-deductible
Entertainment expenses (Supplier) (p	Blocked	Allowed 50% deduction

How does this work?

Setup New Tax Code

[GST | Maintain Tax ...]

1. Click New.

2. Follow the below SETTINGS to create.

Field Name	Field Contents
Code	ND-0 (Recommended code)
Description	Non-Deductible
Tax Type	(Non GST - Both Sales & Purchase)
Tax Rate	0% (please key-in)
Tax Account	GST-301 (This field is compulsory. Due to tax rate is 0%, therefore no posting)
Tax Inclusive	Untick

3. Click Save. See below screenshot.

NOTE : 

Do not click the tax rate arrow key down if the tax account is not defined yet.

Data Entry for Non-Deductible

For Purchase Invoice

1. Insert a new detail row and key-in the total input tax not going to claim.

2. Select the tax code "ND-0".

3. See below screenshot.

For GL Cash Book

1. Insert a new detail row and key-in the total input tax not going to claim.

2. Select the tax code "ND-0".

3. See below screenshot.

NOTE: 
Please ensure you understand the Non-Deductible expenditure from your auditors before you apply this guide.

How to analyse the total tax amount from Non-Deductible?

[ GL | Print Journal of Transaction Listing...]

1. Select the date range to APPLY.

2. Filter at the Tax grid column. See screenshot below.

3. You can see the non-deductible transactions filtered by ND-0.

4. From this instance, the total non-deductible expenditure amount is Rm3030.00

NOTE: 
This non-deductible tax amount will not post to GAF.

@@ Line 3: / Line 3: @@
 ==Introduction==
-This guide will teach you the way to key-in the data entry to analyse the non-deductible expenditure for company income tax purposes.<br />
+:This guide will teach you the way to key-in the data entry and help you to analyse the non-deductible expenditure related to GST. It is follow to the latest 2015 amendment in Income Tax Act 1967.<br />
-'''Income Tax Act 1967 (ITA)'''
-::Section 39 Deductions not allowed:
-::1. Registered taxpayer and claims input tax from RMCD. For example, the company purchase RM64,000 worth of stock, and was charged an input tax of Rm3,840. The input tax claimed from RMCD is not part ::of the cost for the stock and is not an allowable expenditure under paragraph 39(1)(o) ITA.<br />
-::2. Registered taxpayer and does not claim input tax from RMCD even thought it is claimable. If the company does not claim input tax from RMCD. Input tax not claimed from RMCD is not part of the cost ::for the stock and is not an allowable expenditure under paragraph 39(1)(o) ITA<br />
-::3. Input tax claims from RMCD after company is liable to register.<br />
-::4. Company is not registered even though it is liable to register with RMCD<br />
 <br />
-Subject to GST:<br />
+'''GST Expenditure (Effective from YA 2015)'''<br />
-FIZ Local sell to FIZ Local → SR<br />
+:1. para 39(1)(o): GST input tax paid or to be paid not allowed as deduction if:-
-FIZ local sell to LMW Local → SR<br />
+::a. Non-registered person with turnover exceed GST threshold of Rm500,000.
-FIZ/LMW local sell to non-FIZ/LMW → SR<br />
+::b. Registered person fail to claim input tax credit his entitled to claim.<br />
-FIZ/LMW Local sell to Oversea → ZR<br />
+:2. section 39(1)(p): Output tax absorbed by GST by registered person is not allowed as tax deduction.<br />
+:3. GST block input tax & deductible expenses:-
-For example,
 ::{| class="wikitable"
 |-
-! Item !! Item Description !! Qty !! Unit Price<br />(RM) !! Value(RM) !! '''Import Duty<br />(RM)'''
+! Block Tax !! GST input Tax !! Tax deductible?
+|-
+| Passenger car (Cost and maintenance)  || Blocked || Deductible (to claim capital allowance)
+|-
+| Club subscription fee || Blocked || '''Non-deductible'''
+|-
+| Medical insurance/personal accident insurance || Blocked || Deductible
 |-
-| 1. || Shirts || 300 pcs || 25.00 || 7,500.00 || '''1,500.00'''
+| Family benefits || Blocked || Depend (check with your auditors or tax consultant)
 |-
-| 2. || Paints || 100 pcs || 30.00 || 3,000.00 ||   '''600.00'''
+| Entertainment expenses (Potential customer) || Blocked || '''Non-deductible'''
 |-
-|  ||  ||  || Total || 10,500 || '''2,100.00'''
+| Entertainment expenses (Supplier) (p || Blocked || Allowed 50% deduction
 |}
 <br />
-''Assuming 20% import duty (RM10,500 x 20% = 2,100.00)''
+==How does this work?==
-<br />
+===Setup New Tax Code===
+''[GST | Maintain Tax ...]''<br />
-GST on value + Import Duty are subject to GST (SR) = (10,500.00 + 2,100.00) x 6% = '''756.00'''
+:1. Click New. <br />
-<br />
+:2. Follow the below SETTINGS to create. <br />
-Therefore, the Tax Invoice will be presented as per below:<br />
 ::{| class="wikitable"
 |-
-! Item !! Item Description !! Qty !! Unit Price<br />(RM) !! Value<br />(RM)
+! Field Name !! Field Contents
 |-
-| 1. || Shirt || 300 pcs || 25.00 || 7,500.00
+| Code || ND-0 (Recommended code)
 |-
-| 2. || Paints || 100 pcs || 30.00 || 3,000.00
+| Description || Non-Deductible
 |-
-|  || GST (SR-6%)  ||  ||  ||    756.00
+| Tax Type || (Non GST - Both Sales & Purchase)
 |-
-|  || Total Amount Payable ||  ||  || 11,256.00
+| Tax Rate || 0% (please key-in)
-|}
-==How to enter the Tax Invoice if there is a FIZ/LMW transactions to another party? ==
-''[Sales | Invoice...]''<br />
-According to the example mentioned in above.<br />
-. Insert and select the stock items sold with empty tax code. Because the stock items are under FIZ/LMW control. <br />
-::{| class="wikitable"
-|-
-! Item Code !! Description !!Qty !! Unit Price !! Subtotal !! Tax Code !! Tax Amount !! SubTotal(Tax)
 |-
-| SHIRT || SHIRTS ||300 pcs || 25.00 || 7,500.00 || <BLANK> || 0.00 || 7,500.00
+| Tax Account || GST-301 (This field is compulsory. Due to tax rate is 0%, therefore no posting)
 |-
-| PAINTS || PAINTS || 100 pcs || 30.00 || 3,000.00 || <BLANK> || 0.00 || 3,000.00
+| Tax Inclusive|| Untick
 |}<br />
-. Inser new row and enter the GST on total supply value (Rm7500 + Rm3000 = Rm10,500) direct into Taxable Amount column (C1)<br />
+:3. Click Save. See below screenshot.
-::{| class="wikitable"
+::[[File:GST-Non-deductible Expenditure-01.jpg | 440PX]]<br />
-|-
+<br />
-! Description !! Taxable Amount !! Tax Code !! Tax Amount !! SubTotal(Tax)
-|-
+ '''NOTE : '''<br />
-| GST on value Rm10,500.00 || 10,500.00 || SR || 630.00 || 630.00
+ Do not click the tax rate arrow key down if the tax account is not defined yet.<br />
-|}<br />
-::[[File:FIZ&LMW-Invoice Entry-01.jpg | 440PX]]
 <br />
- ''NOTE : ''<br />
+===Data Entry for Non-Deductible===
- ''A1 : Key-in "GST on value" into description.''<br />
+'''For Purchase Invoice'''<br />
- ''B1 : Must select tax code.''<br />
+:1. Insert a new detail row and key-in the '''total input tax not going to claim'''.<br />
- ''C1 : Key-in the Total Supply Value into Taxable Amount.''<br />
+:2. Select the tax code "ND-0".<br />
+:3. See below screenshot.
+::[[File:GST-Non-deductible Expenditure-02.jpg | 340PX]]
 <br />
-. Insert new row and enter the GST on total Import Duty (Rm1,500 + Rm600.00 = Rm2,100) direct into Taxable Amount column (C2)<br />
+'''For GL Cash Book'''<br />
-::{| class="wikitable"
+:1. Insert a new detail row and key-in the '''total input tax not going to claim'''.<br />
-|-
+:2. Select the tax code "ND-0".<br />
-! Description !! Taxable Amount !! Tax Code !! Tax Amount !! SubTotal(Tax)
+:3. See below screenshot.
-|-
+::[[File:GST-Non-deductible Expenditure-03.jpg | 340PX]]
-| GST on Import Duty 20% || 2,100.00 || SR || 126.00 || 126.00
+<br />
-|}<br />
-::[[File:FIZ&LMW-Invoice Entry-02.jpg | 440PX]]
+ '''NOTE: '''
-<br />
+ Please ensure you understand the Non-Deductible expenditure from your auditors before you apply this guide.
- ''NOTE : ''<br />
- ''A2 : Key-in "GST on Import Duty" into description.''<br />
- ''B2 : Must select tax code.''<br />
- ''C2 : Key-in the Total Import Duty value into Taxable Amount.''<br />
 <br />
-==GST Return==
+==How to analyse the total tax amount from Non-Deductible?==
-''[ GST | New  GST Return...]''<br />
+''[ GL | Print Journal of Transaction Listing...]''<br />
-. Process GST Return for the month<br />
+:1. Select the date range to APPLY.<br />
-. Click on print GST-03<br />
+:2. Filter at the Tax grid column. See screenshot below.<br />
+::[[File:GST-Non-deductible Expenditure-04.jpg | 240PX]]
+<br />
-::[[File:FIZ&LMW-GST03-01.jpg | 240PX]]
+:3. You can see the non-deductible transactions filtered by ND-0. <br />
+::[[File:GST-Non-deductible Expenditure-05.jpg | 240PX]]
 <br />
- ''RESULTS : ''<br />
+:4. From this instance, the total non-deductible expenditure amount is '''Rm3030.00''' <br />
- ''5a Total value of supplies = 12,600.00''<br />
-  ''5b total output tax = 756.00''<br />
+  '''NOTE: '''
-<br />
+ This non-deductible tax amount will not post to GAF.
 ==See also==
-* [http://www.sql.com.my/document/sqlacc_docs/PDF/GST36-Input_Entry_for_ATS.pdf Input Entry For ATS]