Thursday, 16 April 2015

Understanding GST Tax Codes - Part 6

Let's look at the last 3 tax codes for supplies, TX-E43, TX-N43 and TX-RE which only applicable to GST registered trader that makes both taxable and exempt supplies (or commonly known as partially exempt trader)

TX-E43

Purchase with GST incurred directly attributable to incidental exempt supplies.


TX-E43 is to be used for transactions involving the payment of input tax that is directly attributable to the making Incidental Exempt Supplies. Incidental Exempt Supplies include interest income from deposits placed with a financial institution in Malaysia, realized foreign exchange gains or losses, first issue of bonds, first issue of shares through an Initial Public Offering and interest received from loans provided to employees, factoring receivables, money received from unit holders for units received by a unit trust etc. 

DescriptionDr.Cr.Tax Code
Interest received from loans provided to employees
Legal fee
GST - Input TaxTX-E43
Bank

TX-N43

Purchases with GST directly attributable to the making Non-Incidental Exempt Supplies.


Tax code TX-N43 is to be used for transactions involving the payment of input tax that is directly attributable to the making Non-Incidental Exempt Supplies. Examples of non-incidental exempt supplies include sale and rental of residential properties and financial services provided. 

DescriptionDr.Cr.Tax Code
Repairs of residential property generating rental income
Repairs and Maintenance
GST - Input TaxTX-N43
Bank

TX-RE

Purchases with GST not directly attributable to the making of taxable or exempt supplies


Tax code TX-RE refers to GST incurred which is not directly attributable to the making of taxable or exempt supplies (or commonly known as residual input tax). Example includes operation overheads for a mixed development property projects which comprise of residential and commercial properties. 

DescriptionDr.Cr.Tax Code
Indirect overheads paid which cannot be attributed to taxable or exempt supplies
Indirect OverheadsTX-REV
GST - Input TaxTX-RE
Bank / Cash
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