Account for GST on imports in Xero

Record GST you pay on imports so Xero takes it into account when calculating your GST payable or refundable. Xero has a special 'GST on Imports' tax rate to account for this.

When would I use the 'GST on Imports' tax rate?

The most common reason to use this tax rate is if you pay for something that doesn’t contain GST (likely imported), and a customs or freight agent charges you the tax afterwards.

For example:

  • You receive a bill for a 10,000.00 import which has no GST. You code it to the appropriate expense or asset account using the 'BAS Excluded' tax rate.
  • A customs or freight agent sends a bill for 1,000.00 GST. This amount must be included in your BAS.

You can use the 'GST on Imports' and 'GST on Capital Imports' tax rates to record the import tax. Xero reports transactions using these rates in your GST Calculation Worksheet and BAS. You don't need to create a special account or tax code.

Your GST account must have the Current Liability account type

Your GST account must have the Current Liability account type for you to be able to select the 'GST on Imports' tax rate for your import tax transactions.

If your GST account doesn't have the Current Liability account type, edit your GST account and change the account type to Current Liability before you enter an import tax transaction.

If you want your GST account to appear in the asset section of your reports, add a switch rule to your report layout.

Apply the 'GST on Imports' tax rate

When you're billed an import tax amount:

  1. Enter the amount as a line item on an existing or new transaction.
  2. In the Account field, choose the GST account.
  3. In the Tax Rate field, choose either GST on Imports or GST on Capital Imports.

    The GST subtotal shows as 0.00 on the transaction. However, the total amount of the transaction is recorded against the import tax rate when reported.

    Image showing import tax bill.

If you use the Full BAS reporting method, check your GST Calculation Worksheet and BAS. Transactions coded to the 'GST on Imports' tax rates are used in the Box 10 and Box 11 calculations.

If you use the Simpler BAS reporting method, these transactions are included in the total reported in label 1B.