A simplified guide to tax in Australia

[Robin4]

I posted this on another thread but it got me to thinking, daily I read of issues involving tax......... W8ECI forms..... Income tax in Hong Kong.....Minneapolis Sales tax...EIN numbers....tax form 1042-S, the list goes on and on and all these things mean nothing to me so, I though I would post a no nonsense guide as to how the tax business works in Australia.

This was in response to another contributors question...."What is GST"?

The GST is a broad-based tax of 10% on the supply of most goods, services and anything else consumed in Australia. Since Goods and Services Tax was introduced in 2000, many thousands of Australians have to calculate the amount of GST to add to the price of goods or services or calculate how much GST is included in the price to claim tax credits for any GST included in the price of goods, services or anything else acquired for use in carrying on the business....Phew!

If you are transacting business in Australia you are required to add and collect GST to all sales or services that you provide. This GST is forwarded to the ATO (Australian taxation office) via a BAS ( Business Activity Statement) and as part of this you will be required to be the holder an ABN (Australian Business Number)! If you are claiming tax credits, in other words you are passing the goods on for further handling before the final purchaser you need to apply to the ATO for a rebate of GST tax paid.

If the provider does not hold an ABN and does not quote GST then the purchaser must retain tax in what is called an Australian Business Number Withholding Tax Account (ABNWT)....For tax credits one must apply to the ATO and quote their ABN in order to receive a GST Tax Credits PDF! 

And if all parties concerned to not adhere to the above they will be subject to the ATO's, KUB scheme.....(Kick up the bum) !! 

There you go, clear as mud hey, but you know that is what you get when you deal with governments.....Even saw this one floating around the other day.....

Cheers.....Rob

[Ingrid55]

@Robin4 - but I don't think AirBNB charges GST on our behalf does it?  I do declare earnings and pay tax on those earnings, and as I am registered for GST because of our other business interests (aside from AirBNB), so will need to resolve this if I've missed something here.

Ingrid

[Robin4]

@Ingrid55....No, not really Ingrid. That post was very tongue in cheek. There is a basis of procedure there but it was in response to a post asking ....'What is GST' so I thought I would put together a concoction using all the common abreviations which surround our convoluted tax rules.

Don't take it too litterally Ingrid....it was a bit of fun. as I am sure you will have seen.

Bugger, you have spoilt my plot now 🙂 😉

But in answer to your question, no Airbnb do not charge GST on our hostings.....and we do not fall into a category where we have to pay it!

Cheers.....Rob

PS: Hey how are you coping with Debbie, is it affecting you at all ot are you too far south?

[Ingrid55]

@Robin4...  He he... okay!  Yes, I also did see that question "What is GST" and I had a little chuckle too!  It's actually the first time I've ventured into the forums, so it's been an interesting way to spend the afternoon!

We haven't really had the severe effects of Debbie that people a little further north have experienced... although the rain we have had has been wonderful - so nice to see the area green again!  

Cheers,

Ingrid

[Robin4]

@Ingrid55 

There is much that you can learn from the forum Ingrid. It can make you the most confident of hosts, because a sample of every problem that has ever happened is represented here. And in most instances, a solution will be offered.

It can also burn a hole in your soul because almost everything that comes to these pages represents heartache that a host or a guest has experienced. You have to have that personality that can disconnect from the issues that are represented here and not carry them through into your hosting. I am one of the fortunate ones....this forum has been like gold to me, I have learnt so much from people who expect no reward other than to help others.

It may have been an afternoons experience Ingrid, but make it a regular afternoons experience and see where it takes you!

We have friends in Lake Cathie (Pronounced 'cat eye' for those not familiar with the area)  and I haven't been able to contact them today which is why I had to ask the question!

Cheers.....Rob

[Ingrid55]

Thanks @Robin4.  Good advice, and will take onboard.  

We are planning on providing more space in our home via AirBNB (will do some work to our home so the new space we offer can be self-contained), so the Forums will be good to keep an eye on and participate in where appropriate.  

As we have used AirBNB to advertise our space for approx 18 months, we are feeling quite confident these days - as well as seeing the opportunity for us to build a residual income into our retirement.  We are in a really good location in Taree - very close to the CBD - and I believe this works in our favour.  

I love the concept of AirBNB, and it suits us well because we are here 90% of the time (due to our businesses being home-based).  

I wonder if there is a meeting planned for Australian (east coast) based AirBNB hosts?  Do you know of any such thing.  It would be super to be able to network with other hosts (maybe annually?)

Have a good week!

Cheers,

Ingrid

[Robin4]

@Ingrid55

Yes Ingrid every capital city in Australia does have get togethers at various times. I can't say I have been to one as yet because other committments have prevented, but I do catch up with hosts in my area and there is much more that can be learned and shared over a cup of coffee than what you will learn on any forum.

I do love the Airbnb concept too Ingrid....although the current model is somewhat removed from the concept, it is still worth being a part of! I have met the most wonderful people through Airbnb and it has been a really rewarding experience.

And I do agree with you....you are in a wonderful part of this wonderful country. Every time I turn on a news service I am so thankful that we are so removed from those problems that humans are capable of inflicting on each other.

Good luck with your hosting Ingrid....and don't get yourself in that situation where you may end up with an ATO KUB!

Cheers....Rob

[Tanya311]

Hi, I am newish to Airbnb - less than 3 months so far. Time to lodge tax return. I go to stay agent tomorrow but I don’t know what I can claim as expenses to reduce my tax pay:

- Mortgage and interest on the house and electricity and water bills?

- Linen, washing powder, towels accessories, renos, plumber and bunnings purchases are okay?

How much I can claim on that  -100%? 

Thanks ahead!

[Marylouise3]

Hi to all you fellow Airbnb owners out there👋

Just to be clear. Airbnb income is NOT subject to GST. 

Airbnb income of < $75, 000AU/ financial year is considered a "hobby". 

You must, however keep records of all income & outgoings & can claim for expenses.

[Marylouise3]

Hi to all you fellow Airbnb owners out there👋

Just to be clear. Airbnb income is NOT subject to GST. 

Airbnb income of < $75, 000AU/ financial year is considered a "hobby". 

You must, however keep records of all income & outgoings & can claim for expenses.