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T
T Yosh
September 1, 2023
Question

GST Tax Code

  • September 1, 2023
  • 1 reply
  • 0 views

I'm new to QB Online. After enabling GST (Singapore Tax), it has automatically created 20 x Tax Codes - a lot.

 

1. I have no idea what purpose each code is for. Is there any explanation / documentation? For example which code should I use for sales within Singapore (8%)? There are more than one Tax Codes that has 8%.

 

2. These codes are not editable. What happens on 1st Jan 2024 when standard GST goes to 9%?

 

    1 reply

    M
    MirriamM
    September 1, 2023

    Thanks for posting in the Community space, T Yosh.

     

    Let me explain how sales tax works in QuickBooks Online (QBO) Singapore.

     

    When you enable the Tax feature, the system will automatically track your sales tax and a default set of GST/VAT codes are created for you. These are the most often used GST/VAT rates where you can add or remove tax rates at any moment.

     

    If you need to update a tax rate, we advise you to create a new tax rate instead of changing an existing one. Since the old rate may have been used on prior transactions changing the rate could affect your sales tax tracking.

     

    In addition, QuickBooks is compliant with Singapore's tax reforms. So, if there are changes in the GST rates, the system will automatically update them.

     

    For more details on how sales tax feature works in QBO, see these articles:

     

     

    To help you manage your taxes in the future, visit our Community help page for related articles.

     

    If you have any questions, don't hesitate to comment below. I'm always here to lend a hand. Have a great day!

    T
    T YoshAuthor
    September 1, 2023

    Hi,

    Many thanks for your prompt help.

     

    Q1.

    You did not answer to my question - I took it that there's no documentation available. I'll ask our accounting firm in Singapore if these 20 x codes make sense, and will get back to you as required.

     

    Q2.

    I totally agree that you mentioned:

    "If you need need to update a tax rate, we advise you to create a new tax rate instead of changing an existing one. Since the old rate may have been used on prior transactions and changing the rate could affect your sales tax tracking."

    This way is how most accounting system follow. I'm surprised that the QB automatically change the tax rate. Please therefore allow me to double check on this - for example, will QB Online change the rate of "SR" from 8% to 9% automatically on 1st Jan 2024?

     

    If yes, I wish to make three more questions:

    2-a) Doesn't it make bad effects for the prior transactions as you mentioned?

    2-b) What exact time / date the change would be made in background? would it be 00:00  1st Jan 2024?

    2-c) Would it be OK If we create custom Tax Code and do not use any of the default 20 x TaxCode? Is there any concerns if we do not use default codes at all?

     

    Many thanks in advance.

     

     

     

    Nicole_N
    Nicole_N
    September 1, 2023

    Hello, @T Yosh. I appreciate your prompt response and follow-up on this. Let me share additional information regarding sales tax in QuickBooks Online (QBO).

     

    For now, we don't have any information yet about QuickBooks will change the rate automatically from 8% to 9% in January 2024. 

     

    Regarding your question about how changing the rate affects transactions, there's really a possibility that your prior transactions will be affected if you edit the tax rates. This could also affect your sales tax tracking. That said, it would be okay for you to create a custom rate rather than updating or editing an existing one. Using the default codes is not mandatory and it's all up to you if you use it or not.

     

    I've added these articles to learn more about GST tax codes: 

     

     

    The Community team is always around if you have further clarifications and QuickBooks concerns. Have a good one.

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