Microsoft documents a Business activity statement (BAS) feature for Australia in Dynamics 365 Finance. The feature helps you fill in your BAS. Microsoft’s setup pages describe several items to put in place first, including the legal entity’s tax registration number, a BAS(AU) reporting format, a reconciliation account, reason codes and reporting codes. The testing checklist at the end is general practice, not Microsoft guidance.
What GST and BAS mean in Finance terms
GST is the goods and services tax. Microsoft’s article says businesses submit the BAS form to the Australian Taxation Office (ATO) to report their taxation obligations. The BAS lists the GST amounts you owe the ATO from sales, and the GST amounts the ATO owes you from purchases. It also covers Pay-As-You-Go (PAYG) tax withheld, PAYG instalments and Fringe Benefit Tax (FBT), so the setup goes further than the GST lines.
What to set up before the first BAS
Microsoft’s procedures list these prerequisites: the additional BAS reconciliation account, BAS PAYG reason codes, BAS fringe benefit reason codes, sales tax reporting codes, and withholding tax groups. The setup steps Microsoft describes are, in order:
- Enter the tax registration number. In Microsoft Dynamics 365 Finance, go to Organization administration > Organizations > Legal entities. On the Tax registration FastTab, enter the number in the Tax registration number field.
- Download the BAS(AU) format. In Microsoft Dynamics Lifecycle Services (LCS), use the Shared asset library to download the latest versions of the Electronic reporting (ER) configurations for the BAS(AU) report format.
- Point the ledger at the format. Go to General ledger > Ledger setup > General ledger parameters. On the Sales tax tab, set Apply sales tax taxation rules to No, then select the BAS(AU) format you downloaded in the Format mapping field.
- Create the reconciliation account. Go to Tax > Setup > Sales tax > Additional BAS reconciliation account. In the BAS reconciliation account field, choose the ledger account that the Settle and post GST procedure uses for sales tax amounts entered by hand. Microsoft says to set this up before you run Post and settle GST.
- Create the reason codes. Go to Tax > Setup > Sales tax > BAS PAYG reason codes, then Tax > Setup > Sales tax > BAS fringe benefit reason codes.
- Set up the reporting codes. Microsoft associates reporting codes with fields on the BAS report, and lists sales tax reporting codes among the prerequisites.
Microsoft’s prerequisite list also includes withholding tax groups, which have their own setup page.
How reporting codes map amounts to BAS fields
Each reporting code is tied to a field on the BAS. The Microsoft article lists reporting codes, including G2 for GST free exports and G3 for other GST free supplies.
Microsoft recommends reporting codes 1013 through 1015 for acquisitions, because they populate the G10 amount together with the G13 to G15 amounts that G10 has to contain.
Reporting code 1015 is the one for capital acquisitions for private use or with non-deductible tax. For the sales tax code that uses it, Microsoft says to enter a value in the Non deductible field on the Sales tax codes page (Tax > Indirect taxes > Sales tax > Sales tax codes).
Some report fields are not used on the official BAS form
On the Additional BAS report boxes page, the cover page fields can be set by hand when a transaction was not posted to the matching reporting code. Some of those fields are not used on the official form. The 7A field (deferred GST on imports), the 1G field (credit for wholesale sales tax), the 7C field (fuel tax credit over claim) and the 7D field (fuel tax credit) each say that this field isn’t used in the official BAS form. Microsoft adds that earlier versions of the official form let you enter deferred GST on imports in the 7A field.
The article uses the 2020 official quarterly BAS form, BAS C, as its reference. It says that for GST, option 1 is supported, and for PAYG, option 2 is supported. Check the form the ATO asks you to lodge before you rely on any hand-entered box.
Settling GST
Go to Tax > Declarations > Sales tax > Australian BAS. Select the settlement period, then enter the from date (the start date of the settlement period) and the transaction date (the posting date for the sales tax settlement).
Next, choose the sales tax payment version, which controls the transactions included. Microsoft lists four options. Original covers the first settlement calculation posted for the period. Corrections covers the subsequent settlement calculations. Latest corrections covers the last settlement calculation posted. Total list covers all sales transactions for the period. Choose the option that matches the settlement you mean to post.
A sensible control step is to review the report before you set Post and settle GST to Yes. When you create a sales tax payment, the date and voucher are filled in for the period, and you can no longer edit the line. On the generated BAS report, you can review the data, then use it to fill in the official BAS form.
What to test before go-live
These checks are general practice, not Microsoft guidance.
- Settle a past period in a test copy of the company, and compare each BAS box with the figures your team lodged for that period.
- Post one sale and one purchase for every reporting code you use, including a purchase with no GST in the price and a capital item with a non-deductible part.
- Run one PAYG withholding example and one fringe benefits example through the reason codes.
- Walk the generated report line by line with whoever signs the lodgement before anyone posts GST.
Questions people ask
Does Dynamics 365 Finance produce an Australian BAS? Microsoft’s article says the BAS feature helps you fill in your BAS. The setup uses an Electronic reporting format called BAS(AU), which you download from Lifecycle Services. The report it generates is data for the official form, so someone still has to fill in the form from it.
Which BAS form does the Microsoft guidance use? The 2020 official quarterly BAS form, BAS C. Check that against the form the ATO currently asks you to lodge, because the article lists fields that are not used on the official form.
Where should I look first if the totals look wrong? Start with the reporting codes on the sales tax codes, because those codes are associated with fields on the BAS report. Then check the Non deductible value for reporting code 1015.
If you want to talk through your GST and BAS setup before go-live, book a free consultation with Austral Dynamics.
Sources
- Business activity statement (BAS). Microsoft Learn, read 2026-11-03.
- Add BAS report boxes and generate the Australia Business Activity Statement BAS. Microsoft Learn, read 2026-11-03.