Gift / Deemed Supply
Introduction
- This guide will teach you to enter the gift and deemed supply in SQL Financial Accounting.
Gift
Gift Rules
- Goods worth not more than RM500 given FREE to the same person in the same year.
- not a supply
- not subject to GST
- input tax is claimable
- Example 1:
- Company XY Sdn Bhd purchased 15 hampers worth RM200/hamper to be given to each of his employees.
- every employee will get one hamper FOC.
- no need to account for output tax.
- input tax on 15 hampers = RM180.00 (6% x RM3,000.00) is claimable.
- Example 2:
- Company CX Sdn Bhd has purchased a watch worth RM400.00 and gave it to one of the director’s son.
- The gift is not subject to GST because its value is less than RM500.00 (gift rule).
- input tax incurred on the purchase is claimable.
- Example 3:
- A Company purchased a laptop worth RM1,500.00 and gave the laptop to a director’s son as a gift.
- GST on the laptop must be accounted for by the company as output tax.
- the value of the goods is more than RM500.00.
- Example 4:
- A company purchased a laptop worth RM1,500.00 three years ago. Currently the company has given the laptop to one of his business partners. For the purpose of accounting GST, the company has to use open market value of the goods now where the value of the goods is RM450.00, i.e. the value of the goods has depreciated.
- no need to account for output tax on the gift
- the value of the goods is less than RM500.00. (Gift rule applicable)
- Example 5:
- Company C rewarded RM5,000.00 to his best employee of the year.
- not subject to GST
- money is neither goods nor services
Gift Entry
[GST | GST / Deemed Supply...]
- 1. Click on NEW.
- 2. Select Type : Gift.
Note: You will see this note "Entitle Yearly Exempt RM500.00" at the bottom.
- 3. Select Code : Customer Code.
- 4. Select Item Code: Item Code.
- 5. Select Expenses GL Account. User has to create a GL Account in Maintain Account.
- For example,
Item Code Description Qty UOM U/Cost Sub Total Tax Tax Rate Tax Amount SubTotal (Tax) Expenses GL Account ANT ANTENA 1.00 UNIT 350.00 350.00 DS 6% 0.00 350.00 999-999 GST Gift/Deemed Supply
- 5. Yearly Amount will immediately updated together with the current Gift document amount.
Yearly Amount = Cumulative gift amount in the same year + current gift document amount
- 6. Below screenshot is the 2nd gift document created for same company/person within a year.
- 7. System will auto calculate tax amount once exceed RM500.00
Gift Date Gift Cost Tax Amount 05/01/2016 ANTENA 200.00 0.00 17/02/2016 ANTENA 350.00 33.00 (RM550 X 6%)
Oversea Supplier Invoice
[Purchase | Purchase Invoice...]
- 1. Create the oversea supplier invoice at Purchase Invoice.
- 2. Select the tax code “IM-0”. Tax amount = 0.00
Received Forwarder Notification from K1 /Invoice
- Let's said in the K1 form details:-
Description Amount (MYR) Calculation Goods Value (A) 1,155.00 USD300 x 3.8500 Custom Duty (B)
(assumed is 5%)57.75 Rm1,155 x 5% Total Taxable Amount (C) 1,212.75 A + B GST - IM 72.77 C x 6% = Rm1,212.75 x 6%
- Usually, the forwarder will invoice to the principal company for the following details:-
Description Net (MYR) GST Gross (MYR) Est. Duties (Import&/Excise Duty) 57.75 Est. GST Import (RM1,212.75 x 6%) 72.77 Est Duties + GST Import 130.52 130.52 Duty Processing Fee 100.00 6.00 106.00 Total Payable 236.52
NOTE :
GST Import can be calculated in different way. It might based on total weight (ie. weight x container) or total meter square (ie,meter square x container). For example, GST Import = 30,000m2 x 10 containers x 6% = RM18,000.00
Deemed Supply
[GST | GST / Deemed Supply...]
- You can found the following tax code available in SQL Financial Accounting.
Tax Code Description Tax Rate % IM-0 Import of goods with no GST incurred (for Foreign Supplier Account) 0% IM Import of goods with GST incurred 6%
Oversea Supplier Invoice
[Purchase | Purchase Invoice...]
- 1. Create the oversea supplier invoice at Purchase Invoice.
- 2. Select the tax code “IM-0”. Tax amount = 0.00
Received Forwarder Notification from K1 /Invoice
- Let's said in the K1 form details:-
Description Amount (MYR) Calculation Goods Value (A) 1,155.00 USD300 x 3.8500 Custom Duty (B)
(assumed is 5%)57.75 Rm1,155 x 5% Total Taxable Amount (C) 1,212.75 A + B GST - IM 72.77 C x 6% = Rm1,212.75 x 6%
- Usually, the forwarder will invoice to the principal company for the following details:-
Description Net (MYR) GST Gross (MYR) Est. Duties (Import&/Excise Duty) 57.75 Est. GST Import (RM1,212.75 x 6%) 72.77 Est Duties + GST Import 130.52 130.52 Duty Processing Fee 100.00 6.00 106.00 Total Payable 236.52
NOTE :
GST Import can be calculated in different way. It might based on total weight (ie. weight x container) or total meter square (ie,meter square x container). For example, GST Import = 30,000m2 x 10 containers x 6% = RM18,000.00
Forwarder Invoice Entry (Purchase Invoice)
[ Purchase | Purchase Invoice...]
- 1. Select the forwarder supplier code in Purchase Invoice.
- 2. Insert the following fields:-
- Import Curr.Code (for display only)
- Import Curr Rate (for display only)
- Import Purchase Amt (GST Import input)
- Tax Amount
- Local Tax Amount
- 3. Click on the side button under Import Purchase Amt column. See screenshot below.
- 4. You have to input the info according to 2.3. Received Forwarder Notification from K1 /Invoice example.
Field Name Input Value Explanation Currency Code USD Currency to the goods purchased Currency Rate 3.85 Follow K1 exchange rate Purchase Amount 300.00 Goods foreign value as stated in K1 form Custom Local Amount 1,212.50 Follow K1 total taxable amount.
Formula = Purchase Amount + Custom DutyTax IM 6% Tax Amount 72.77 1,212.75 x 6% Permit No K1-3232323 Key-in the K1 no.
- 5. After press OK to exit the GST Import screen, the purchase invoice item description will be updated as “Purchase Value USD 300.00@3.8500 = RM 1,155.00, Permit No: K1-32323232” from the GST Import entered.
- 6. Below is the sample of Forwarder invoice entry.
Highlight Changes
| Date | Initiated by | Remarks |
|---|---|---|
| 28 March 2015 | Loo | Initial document. |
| 22 April 2015 | Loo | Update K1 and new screenshot |
| 24 June 2015 | Loo | For forwarder invoice, tax code IM should refer to Local Tax Amount instead of Tax Amount. |