Tax treatment (GST treatment)
The code that decides which activity-statement label a transaction feeds.
A tax treatment is a code on a category or transaction that says what kind of supply it is for GST purposes — GST on Income, GST-Free, Input Taxed, GST on Expenses, GST on Capital, Private or BAS Excluded. It is not a rate: it decides both whether GST is inside the price and which label on the activity statement the amount lands on.
Accounting platforms call the same thing a tax rate or tax code. The treatment is set once on the category as a default and can be overridden on any single transaction; it should never be inferred from whether someone typed a GST figure, because a zero GST can mean GST-free, input-taxed or out of scope, and those go to different labels.
Worked example
Three lines on one bank statement: a $12 bank fee (GST-Free Expenses → G11 and G14), $38 of interest received (Input Taxed Income → G1 and G4) and a $2,200 laptop (GST on Capital → G10, with $200 to 1B). Same feed, three labels — the treatment is what tells them apart.
Common mistake
Treating “no GST recorded” as “GST-free”. Interest and residential rent carry no GST but are input-taxed, and reporting them at G3 instead of G4 misstates the return and hides the credits you are not entitled to on related purchases.
Grounded in ATO guidance. Figures last checked . General information, not tax advice.
Related terms
Input taxed
Sales with no GST that also deny credits on related purchases.
GST-free
Sales with no GST where you still claim credits on your purchases.
BAS Excluded (out of scope)
Money that is not a supply and does not appear on the activity statement.
Capital purchase (GST on Capital)
An asset you buy to use over years — G10 on the BAS, then depreciated.
← Back to the full glossary.
Questions about this term
Tax treatment (GST treatment): common questions
- Is a tax treatment the same as a tax rate?
- No — it is a code, not a rate. The treatment says what kind of supply a transaction is for GST purposes: GST on Income, GST-Free, Input Taxed, GST on Expenses, GST on Capital, Private or BAS Excluded. Accounting platforms call it a tax rate or tax code, but it decides both whether GST is inside the price and which activity-statement label the amount feeds.
- Can the treatment be worked out from whether a GST amount was entered?
- No — a zero GST figure can mean GST-free, input-taxed or out of scope, and those go to different labels. Interest and residential rent carry no GST but are input-taxed; reporting them at G3 instead of G4 misstates the return. The treatment has to be set, not inferred.
- Is a treatment set on the category or on the transaction?
- Both. In 2Fin the treatment is set once on the category as a default, and it can be overridden on any single transaction where that line is different. The tax treatment and activity statement feature is where those defaults live and where the labels are assembled from them.
- How can one bank feed produce three different BAS labels?
- Because the treatment, not the source, decides the label. Three lines on one statement — a $12 bank fee (GST-Free Expenses → G11 and G14), $38 of interest received (Input Taxed Income → G1 and G4) and a $2,200 laptop (GST on Capital → G10, with $200 to 1B) — land on different labels because their treatments differ.
Let Fin handle the jargon for you
Connect your bank and Fin sorts your income, expenses and GST automatically — so terms like this just become numbers that are already worked out. Free to start, no card needed.
Get 2Fin free →