Company Tax and GST Calculation Worksheet for BAS

Hi All,

I have an issue with the GST Calculation Worksheet for BAS (Australia) showing income tax as sales (under G3) and Purchase (under G11 and G14).

I have follow one of your forum topics and crated two accounts in the Chart of Accounts and after that Journal with Debit to Income Tax Expense account and Credit to Income Tax Payable account. Balance was 0 and all was GST free. .After that I have made a payment transactions that categorized as Income Tax Payable (Liability). All works fine.
However, when I create reports and GST Calculation Worksheet for BAS I got input as a sales in and purchases in . Balance on the end is “0” again and the final balance on this worksheet was OK.
Therefore my issue is that Income tax should not be reported as Sales nor Purchases. For example if in the last quarter I do not have any sales (income) in the Worksheet will be reported that I have sales of $ which is really income tax or liability.

I would like that my book keeping is correct if possible.

I am not sure if this is clear enough and understandable. I can create some screen shots but this post is already long.

"lubos Jan '14

First, create two accounts in your Chart of Accounts:

Income Tax Payable under Liabilities
Income Tax Expense under Expenses

Then create new journal entry to account for income tax expense, let’s say the income tax is $1,000

Debit $1,000 to Income Tax Expense account
Credit $1,000 to Income Tax Payable account

This will bring your $1,000 into Profit & Loss Statement.

When you pay income tax to tax authority, it’s simple cash payment transactions that will have to be categorized as Income Tax Payable so your tax liability comes to zero once the tax is actually paid."

PS I have read post:What account does corporation tax go under? Jun15 as well.

@TomD, it sounds like you may be using an obsolete version of Manager. And it will not do you much good to refer to forum posts that are so old. The program advances rapidly.

I suggest reading this Guide: Then update your localizations for Australia here: If you still have trouble, be more specific and include screen shots.

Thanks Tut,
I am using until tonight 19.6.45 and I have just downloaded and installed 19.6.63. version and I have also, downloaded and import files from: as you suggested.

Please see the uploaded images showing that there is no sales or purchases made, however GST worksheet still showing sales and purchasing which is coming from Journal entry. The journal entry is done as per Lubos post above.

TEST%20-%20GST%20Calculation%20Worksheet%20 TEST-%20Profit%20and%20Loss%20Statement

Thanks again

Hi Tut,
In addition to previous post please see the Journal entry image as well.

The View screen for the journal entry does not help. You need to show the Edit screen. I suspect it will show you have applied tax codes to what appears to be an attempt to transfer an accrued tax liability to an expense account. That seems questionable.

If you were accruing the income tax liability and then paid it, you should have used a Payment form, not a journal entry. And no tax codes should be applied. Those are applied on sales and purchases. When you pay a tax liability, you are not accruing additional tax liabilities or credits. You are discharging an obligation already created.

If you are doing something else, please explain.

Hi Tut,

Please see the uploaded files in edit form.

Edit%20Company%20Tax%20Payable Edit%20Company%20Tax

I have try to follow previous post in this regards. This happening when I try to record payment of the company tax quarterly and/or annually.

See below:


Jun '15

You should have two accounts.

  • Corporate tax (expense)
  • Provision for corporate tax (liability)

At the end of financial year, you would make a journal entry to debit expense account and credit liability account. This way corporate tax expense is allocated to the financial year it is incurred regardless when it’s actually paid.

When corporate tax is paid, you would allocate the payment to Provision for corporate tax liability account so the balance (hopefully) comes to zero.

You have confirmed my suspicions. You are incorrectly recording a payment with a journal entry. And you are applying tax codes to the transaction. See my previous post about what you should be doing.

Thanks Tut,