Accounting for your gambling sales
You do not need to issue tax invoices for sales that are solely gambling sales.
Claiming GST credits
If you conduct gambling events, and you are registered for GST, you can claim GST credits on the GST included in the price of any non-monetary prizes you purchase.
You are not entitled to GST credits for:
- non-monetary prizes you provide that were donated to you
- monetary prizes you provide.
You cannot claim GST credits for any gambling purchases you make, for example, if you purchase tickets to enter a raffle.
If you bear a financial loss because the total amount of monetary prizes you paid during a tax period was greater than the total wagered amount you received, you can offset this loss against your profit in the next tax period.
If you write off any wagered amounts you were due to receive in a tax period as bad debts, you can add these amounts to the total monetary prizes you paid for that tax period.
If you later recover any part of a bad debt, you must add it to the total wagered amount you received during the tax period you recovered the bad debt.
Completing your activity statement
You may use either the calculation worksheet method or the accounts method to complete the relevant boxes on your activity statement for the reporting period.
The amounts you report on your activity statement will depend on the accounting basis you have chosen or are otherwise required or permitted to use. You can account on a cash basis or a non-cash basis.
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If you pay only cash prizes, report your margin from gambling supplies for the reporting period at G1 (total sales).
If you calculate an amount that is less than zero, do not include anything at G1 for your gambling supplies. You take the excess amount away from the gross proceeds of your gambling supplies on your next activity statement.
If you use the accounts method, report the amount of GST calculated on the margin from your gambling supplies at 1A (GST on sales). If using the calculation worksheet method, use the calculation worksheet to work out the amount to include at 1A.
If you only provide non-cash prizes for your gambling supplies:
- do not deduct the value of these prizes from the gross proceeds of your gambling sales
- include the gross proceeds from your gambling supplies at G1 (total sales).
If you use the accounts method, you should report:
- the amount of GST on the gross proceeds from your gambling supplies at 1A (GST on sales)
- the amounts you paid to purchase the prizes at G10 (capital purchases) or G11 (non-capital purchases) in the relevant reporting period
- the amount of GST credit you are entitled to claim for the purchase of non-cash prizes at 1B (GST on purchases).
If you are using the calculation worksheet method, use the worksheet to calculate the amount to include at 1B.
Cash and non-cash prizes
If you provide cash and non-cash prizes, report your margin at G1. When working out the margin, do not deduct the value of the non-cash prizes you provide from the gross gambling proceeds.
If using the accounts method, report at 1A (GST on sales) either:
- the GST on your gambling supplies excluding the non-cash prize
- zero if your margin on gambling supplies is less than zero.
If you are using the calculation worksheet method, use the worksheet to work out the amount to include at 1A (GST on sales).
Include the purchase of non-cash prizes on your activity statement in the same way as described under 'Non-cash prizes'.
A publican operating gaming machines is registered for GST and reports on a monthly activity statement. In October the publican had gross proceeds of $100,000 but paid out $80,000 in cash prizes.
He includes the net proceeds of $20,000 at G1 (total sales) on his October activity statement for gambling supplies.
Using the accounts method the publican would include the GST payable amount of $1,818 at 1A (GST on sales) on his activity statement. The amount of $1,818 is one-eleventh of the net profit on his gambling supplies of $20,000.
If he had used the calculation worksheet method, he would use the worksheet to work out how much to include at 1A.
If the publican had paid non-cash prizes instead of paying cash prizes, he would account for the GST on his gambling supplies differently on his activity statement.
If he paid $80,000 for non-cash prizes for October, he would include his gross gambling sales of $100,000 at G1 (total sales) on his October activity statement.
He would then include the $80,000 he paid for non-cash prizes at G10 (capital purchases) or G11 (non-capital purchases), depending on whether the prizes were capital or non-capital items.
Using the accounts method, the publican would include $9,090 at 1A (GST on sales), which is the GST he is liable to pay on his $100,000 gambling sales.
The publican would claim GST credits of $7,272 at 1B (GST credits on purchases), which is the amount of GST he paid in the price of the purchases of the non-cash prizes.
If he had used the calculation sheet method, he would use the worksheet to work out how much to include at 1A and 1B.
End of example