Changes to Tax Codes in Australia
Last Updated: 25 March, 2013
By popular request two Tax Codes are being replaced in Xero for the Australian market so that they are easier to understand for day-to-day transactions and easier to handle at BAS time.
The changes were released 25 March 2013 (approx 7am NZT).
The changes are:
- “No GST” and “GST Exempt” codes are being removed and will no longer be available.
- “BAS Excluded” , “GST Free Expenses” and “GST Free Capital” are being added
- The chart of accounts and other items that use the retired codes will be updated for customers automatically
- For many of you it is business as usual if you don’t specify the TaxType on your API calls as you rely on using the AccountCode only which defaults the tax code to whatever the organisaiton has setup.
- For developers that specify a TaxType on line items when creating bank transactions (spend money, receive money), credit notes, invoices, items, manual journals and receipts via the Xero API the following changes will apply :
- The new TaxType of EXEMPTCAPITAL can be used for classifying line items as “GST Free Capital”.
- If you specify a TaxType of NONE or EXEMPTINPUT against an Australian organisation after the change in March 2013 then the Xero API will automatically map these to either EXEMPTEXPENSES or BASEXCLUDED based on the following mapping rules :
- Where possible we encourage developers to specify just an AccountCode on a line item so that Xero can populate the TaxType automatically based on the chart of accounts for the user’s organisation.
- Sometimes the default TaxType may need to be overridden, the recommended way of doing this is :
- Give the user a choice of TaxTypes that are available for their organisation
- Use GET TaxRates to retrieve the tax rate names and the TaxType code which you can use on invoices, credit notes, items, manual journals, bank transactions (spend and receive money) and receipts
- If your application allows users to set their Xero tax rates in your application and your Australian customers are using the retired tax rates then they should update these to use one of the new tax codes once these have been introduced.
- We don’t recommend to rely on the automatic mappings from the retiring rates (mentioned above) as this may be confusing for users, particularly new users as after the change as they would never have seen the retired tax rates if you have hard coded these as options in your application.
- For Business editon orgs or those that can use BAS, it means they’ll see BAS Excluded, GST Free Expenses, GST Free Capital tax rates once the change is released in March 2013.
- For Partner edition orgs (GST cashbook) this means the basic code of No GST is changed to BAS Excluded.
- No GST and GST Exempt is kept on old transactions that used them, but will not be available to be used on any new transaction (or old transaction being edited causing it to be resaved)
How does this change affect developers?
|AccountType||Retired Tax Code Name||Retired Tax Type||New Tax Code Name||New Tax Type|
|“Any”||GST Exempt||EXEMPTINPUT||BAS Excluded||BASEXCLUDED|
|EXPENSE||No GST||NONE||GST Free Expenses||EXEMPTEXPENSES|
|“All other accounts”||No GST||NONE||BAS Excluded||BASEXCLUDED|
Best Practice – AccountCodes and TaxTypes
1) What is the impact of the change on different versions of Xero in Australia?
2) Are old transactions affected ?
Please get in touch with the Xero API team as soon as possible if you have any questions about these changes. The easiest way to reach us is firstname.lastname@example.org