You can download a printable version of Cash and non-cash accounting (NAT 3136, 241KB) in portable document format (PDF).
You can order a printed copy by noting the full title of the publication and either:
|
Terms we use
When we say:
- you, we mean you as an entity carrying on an enterprise which is registered or required to be registered for GST
- GST credits, we mean the GST term input tax credits
- purchase, we mean the GST term acquisition
- sale, we mean the GST term supply
- payment received or made, we mean the GST term consideration.
|
If you are registered, or required to be registered for GST, you must pay GST on your taxable sales. You can generally claim GST credits for the GST included in the price of goods and services that you purchase. You would then go on to calculate the GST you are liable to pay and the GST credits you are eligible to claim when you lodge your activity statement after the end of each tax period.
The tax period you account for GST will depend on whether you account for GST on a cash or non-cash (accruals) basis. You can only use one accounting basis.
You are eligible to account for GST on a cash basis if you meet any of the following criteria:
- you are a small business with an annual turnover (including the turnover of your related entities) of less than $2 million
- you are not operating a business, but are carrying on an enterprise with a GST turnover of $2 million or less
- you account for income tax on a cash basis
- you carry on a kind of enterprise that we have worked out is able to account for GST on a cash basis, regardless of your GST turnover
- regardless of your GST turnover, you are one of the following
- an endorsed charitable institution
- a trustee of an endorsed charitable fund
- a gift-deductible entity
- a government school.
If you do not satisfy any of the above criteria, you can still contact us for more information on 13 28 66.
|
For more information about GST, other small business concessions, and calculating your annual turnover, visit Goods and services tax (GST) - home.
For more information about how to calculate your GST turnover for purposes such as GST registration, refer to GST for small business (NAT 3014).
|
If you account for GST on a cash basis, you must:
- account for the GST payable on your sales in the tax period you receive payment for them. If you receive only part payment for a sale in a tax period, you account for only the GST that relates to the part payment in that tax period
- claim GST credits for your business purchases in the tax period you pay for them. If you pay only part of the cost of a business purchase in a tax period and have a valid tax invoice, you claim only the GST credit for that part of the cost in that tax period.
To claim a GST credit for a purchase that cost more than $82.50 (including GST), you must have a valid tax invoice at the time you lodge your activity statement. If you do not have a valid tax invoice, you should wait until you receive one from your supplier before you claim the GST credit, even if this is in a later tax period.
|
For more information on choosing to account on a cash basis, refer to Goods and Services Tax Ruling GSTR 2000/13 Goods and services tax: accounting on a cash basis. This ruling outlines the factors we will consider in determining whether it is appropriate for you to account for GST on a cash basis.
For more information on what constitutes a valid tax invoice, refer to Valid tax invoices and GST credits (NAT 12358).
|
You can choose to account for GST on a non-cash basis even if you are eligible to account for GST on a cash basis. If you are not eligible to account for GST on a cash basis, you must account on a non-cash basis, unless we give you approval to use a cash basis.
The change can only take effect on the first day of a tax period.
In the first tax period that you change over from cash to non-cash basis, you will need to account for sales or purchases that you have not previously accounted for or claimed.
For GST on sales where invoices were issued prior to the date of change, but payments were yet to be made or received, you need to report these sales in the first tax period you use the non-cash (accruals) method.
If you partly accounted for GST for a sale before the change, you must account for the balance of the GST on the sale in the first tax period you use the non-cash (accruals) method.
In the first tax period that you start to use the non-cash (accruals) method you are eligible to claim any unclaimed GST credits that you hold a tax invoice for.
If you account for GST on a non-cash basis, you will account for all GST payable and all GST credits in your activity statement for the earlier of either:
- the first tax period in which an invoice is issued relating to that sale
- the first tax period in which any of the payment is received or made.
Example
Philip is a GST registered architect who accounts for GST on a non-cash basis and lodges monthly activity statements. On 30 September, he sells design plans for a new restaurant to a developer for $7,700 (including $700 GST). Philip gives the developer a valid tax invoice on the day of the sale but payment is not due for 30 days.
Philip's tax period ends on 30 September. As Phillip does not account for GST on a cash basis and has already issued a tax invoice for the sale, the $700 GST payable must be accounted for in his activity statement for the tax period ending on 30 September, even though he has not received any payment from the developer.
The developer also accounts for GST on a non-cash basis and also lodges monthly activity statements. The developer can claim the GST credit in their activity statement for the tax period ending 30 September, because the tax invoice is dated 30 September.
However, if the tax invoice was not a valid tax invoice (that is, it did not contain the information required for a valid tax invoice), the developer would claim the GST credit in their activity statement for the tax period that he receives a valid tax invoice.
If you are eligible to change accounting methods, there are a number of ways you can lodge a request. You can:
- phone us on 13 28 66
- write to us at
Australian Taxation Office
PO Box 3524
ALBURY NSW 2640
- ask your accountant to contact us on your behalf.
For more information on cash and non-cash (accruals) accounting, refer to:
You can obtain printed copies of many of our publications by:
- visiting online ordering
- phoning our Publications Distribution Service on 1300 720 092.
You can also:
- phone us on 13 28 66 between 8.00am and 6.00pm, Monday to Friday
- write to us at
Australian Taxation Office
PO Box 3524
ALBURY NSW 2640
If you do not speak English well and need help from the ATO, phone the Translating and Interpreting Service on 13 14 50.
If you are deaf, or have a hearing or speech impairment, phone the ATO through the National Relay Service (NRS) on the numbers listed below:
- TTY users, phone 13 36 77 and ask for the ATO number you need
- Speak and Listen (speech-to-speech relay) users, phone 1300 555 727 and ask for the ATO number you need
- internet relay users, connect to the NRS on relayservice.com.au and ask for the ATO number you need.
Last Modified: Friday, 17 May 2013