# Trading Entities and BAS Statements



## Sugar Dunkaton (14 January 2010)

Good Morning,

For those that are either tax gurus or running a company that you trade through, what are your requirements for paying GST and lodging BAS Statements. As I understand, the ATO uses a phrase to the effect of "if your turnover (or sales) is over 50,000 a year you can apply for GST". 

Does this force your hand to lodge BAS Statements even though the trading company is not selling any specific goods?


----------



## Trembling Hand (14 January 2010)

Sugar Dunkaton said:


> Good Morning,
> 
> For those that are either tax gurus or running a company that you trade through, what are your requirements for paying GST and lodging BAS Statements. As I understand, the ATO uses a phrase to the effect of "if your turnover (or sales) is over 50,000 a year you can apply for GST".
> 
> Does this force your hand to lodge BAS Statements even though the trading company is not selling any specific goods?




It doesn't matter. If you are trading and making a profit you are going to be caught with having to do quarterly Activity Statements. So you might as well register for GST and get that back off the robbing B&*&^%#%^'s .


----------



## Krusty the Klown (14 January 2010)

The turnover figure is $75K p.a.

And as TH says even though you don't collect GST from customers, you are still paying it on each input cost. 

If you trade a lot, for 2 or 3 hours per year of extra admin, would it be worth being refunded a minimum of a few hundred dollars? Most would say yes I reckon.


----------



## yonnie (16 January 2010)

also depends on your broker.
if you are with Interactive Brokers, you cant claim back Gst `cos they dont charge you any on their brokerage.

ofcourse you can claim gst on other costs like gst on vehicle expenses, power, telephone, business magazines etc.


----------



## Krusty the Klown (16 January 2010)

This subject piqued my interest so I looked it up.

It seems that even share and derivative trades are classed as a "financial supply", which means that they are input taxed for GST purposes.

This translates as the supplier (or trader) cannot claim GST input tax credits - ie you cannot get refunded the GST you pay on expenses.

Sugar D, no, you do not have to worry about registering for GST.

There you go, you learn something new every day.


----------



## Trembling Hand (16 January 2010)

Krusty the Klown said:


> This subject piqued my interest so I looked it up.
> 
> It seems that even share and derivative trades are classed as a "financial supply", which means that they are input taxed for GST purposes.
> 
> ...




Krusty is there not somewhere in that ridiculous tax law about claiming a  reduced credit acquisition, I think 75%, GST?

On things such as brokerage and Fin services relating to that transaction.

Then things such as assets used to carry on your business and expenses used for carrying on your business activities just treated like any other biz GST.


----------



## Krusty the Klown (16 January 2010)

Yes there is, in limited circumstances, however, ie you have to investigate as to whether you qualify. I would have to research further to find out.

From what I read I did not think most traders would qualify.

It sounds like you were eligible though. Did your tax adviser say on what grounds you were?


----------



## Trembling Hand (16 January 2010)

Krusty the Klown said:


> Yes there is, in limited circumstances, however, ie you have to investigate as to whether you qualify. I would have to research further to find out.
> 
> From what I read I did not think most traders would qualify.
> 
> It sounds like you were eligible though. Did your tax adviser say on what grounds you were?




No I think I'm not now but was at some stage as an individual. Now all my trading is done via a company, its all too complicated for me cus there is "other" things going on within that company. 

But its clear that there isn't many profitable traders here. Whether your are registered for GST or not you are still going to be doing querterly activity statements IF you are making constant profits.


----------



## sinic (16 January 2010)

Regarding Interactive Brokers and GST.  I asked them some time ago they said (in an email) that their brokerage on aust shares includes GST.

So you can claim 75% of the GST component if you are registered for GST.

So divide total comms by 11 and then get a refund of 75% of that.
Apparently no gst on futures comms or CFDs though.


----------



## yonnie (17 January 2010)

there you go, you cant seem to trust any replies on the forums. a couple of years ago somebody asked IB and got an answer that there was no gst on brokerage.

I run a partnership as a business trading securities and I claim all paid gst on expenses 100% and no problems sofar.

haven`t had an ATO audit yet and if they insist on 75% I can always return 25% and in the meantime I`ll trade with their money.

btw: as soon as you have an ABN number you got to file a BAS statement, profitable or not.


----------



## Trembling Hand (17 January 2010)

yonnie said:


> haven`t had an ATO audit yet and if they insist on 75% I can always return 25% and in the meantime I`ll trade with their money.




And they will back charge you interest @ about 13%



yonnie said:


> btw: as soon as you have an ABN number you got to file a BAS statement, profitable or not.



Thats not my point. Even if you do not have an ABN or register,* if *you are profitable the TAX man is going to start sending you querterly Activity Statements.


----------



## Trembling Hand (17 January 2010)

Just another thing here is confirmation that Aussie futs have GST, I cannot find the stock one, yet.


----------



## yonnie (17 January 2010)

TH, the thread starter was talking about companies, which have to have an ABN number and I dont think that the quarterly statements to determine the profit you are talking about are called BAS statements.

and I dont mind paying 13% interest if I have the use of their capital for years.


----------



## Krusty the Klown (17 January 2010)

yonnie said:


> there you go, you cant seem to trust any replies on the forums.




Yes, thats true.



> btw: as soon as you have an ABN number you got to file a BAS statement, profitable or not.




No you don't, only if your turnover is higher than $75K. You can register for GST below $75K if you want to, but it is not compulsory.


----------



## yonnie (18 January 2010)

Krusty the Klown said:


> No you don't, only if your turnover is higher than $75K. You can register for GST below $75K if you want to, but it is not compulsory.




BAS statements are not only for GST, but also for PAYG payments/instalments, fringe benefits, wine tax and luxery car tax.

what you are referring to is that you dont have to register for GST if your turnover is under 75k per year, but you still have to fill in the BAS statement, even if you dont have to pay any taxes.


----------



## Krusty the Klown (18 January 2010)

yonnie said:


> BAS statements are not only for GST, but also for PAYG payments/instalments, fringe benefits, wine tax and luxery car tax.
> 
> what you are referring to is that you dont have to register for GST if your turnover is under 75k per year, but you still have to fill in the BAS statement, even if you dont have to pay any taxes.




Apologies, I should have been clearer.

I was referring to an IAS - Instalment Acitivity Statement. Its simpler than a BAS, you use it if you make less than $75K, have no GST, FBT or wine equalisation tax obligations. You use this instead of a BAS.


----------



## yonnie (18 January 2010)

ktk, thank you for your explanation


----------



## Sugar Dunkaton (18 January 2010)

Just for the interest of those in the thread, our accountants have not spoken to us for about a year, and I realized that there has not been a BAS/IAS statement done since the creation of the company.

Anyways, we are in for some hefty late fees.


----------



## Pager (18 January 2010)

Registering for GST is worth it IMO, most of us unless we have other business,s running through a company don't charge GST we only pay it, so irrespective of how much you make as a trader once your volumes are at a consistent level that the GST you pay is a sizable amount then claim it back.

I trade as a PTY ltd through a Family Trust, i place all my orders before the market opens then go to work, what i claim back from GST or the 75% im able too, pays all my accounting fees for the year plus some


----------

