Account for non-standard GST rates

Account for non-standard GST rates on special supplies in Xero. You can manage non-standard GST rates in different ways in Xero.

What are 'special supplies'?

'Special supplies' (as defined by Inland Revenue) are supplies that are different from normal business sales or purchases. Different GST rates may apply to them.

Add a custom tax rate for a non-standard GST rate

If you often deal with one non-standard rate of GST you can add your own custom tax rate to apply to transactions as needed.

Manage a one-off non-standard GST rate

If the non-standard GST rate will vary between transactions, or it's just a one-off transaction, follow the process outlined below. The example given is for a sales invoice, but the same logic applies to other transaction types.

Process:

  1. Create a sales invoice and set it to Tax Exclusive.
  2. Work out the proportion of the non-standard GST rate to the standard rate.
  3. Apply GST at the standard rate to that proportion of the transaction.
  4. Apply the tax rate No GST to the remainder of the transaction amount.

Example

You need to account for a one-off supply of rest home accommodation of 20,000 (GST-exclusive) using the composite GST rate of 12.3%.

  1. Go to Accounts, then click Sales.
  2. Click New to create a new sales invoice.
  3. Enter the customer or group name, dates and other invoice details.
  4. Make sure you set the Amounts are field to Tax Exclusive.

    Image showing header with tax exclusive tax rate.

  5. Work out the proportion of the non-standard GST rate to the standard rate. In this case, 12.3/15 = 0.82.
  6. Split the transaction over 2 lines in the sales invoice. On the first line, multiply the transaction amount by the proportion of the non-standard GST rate. In this case:

    20,000 x 0.82 = 16,400

    Apply GST at the standard 15% rate to this amount.

  7. On the second line, enter the remainder of the transaction amount with the tax rate No GST.

    Image showing 2 transaction lines on invoice.

  8. Save the invoice.

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