Legislative instrument for RCTI agreements

The New Tax System (Goods and Services Tax) Act 1999 - Recipient Created Tax Invoice - Embedded Agreement Amending Legislative Instrument 2009 commenced on 1 July 2009.

The instrument provides taxpayers with an alternative to the current requirement for the recipient to hold a written agreement with the supplier before issuing a recipient created tax invoice (RCTI).

This will give taxpayers the option of either:

• maintaining separate written agreements specifying the supplies to which each agreement relates, or
• embedding this information or specific terms, as outlined in the legislative instrument, in the tax invoices they issue.

It reduces the risk of entities not holding a valid written agreement to issue RCTIs and provides them with an alternative to the current requirement.

What you must do?

The requirements to issue an RCTI will not change, only the form that the written agreement can take.

For taxpayers this means that written agreements will not have to be retained where the alternative embedded approach is adopted.

The impact of this change is that an embedded agreement will be treated as an alternative to a written agreement for the purposes of issuing RCTIs.

Legislation and supporting material

RCTI 2009/1 - Recipient Created Tax Invoice - Embedded Agreement Amending Legislative Instrument 2009

GSTR 2000/10 - Goods and services tax: recipient created tax invoices (As at 6 May 2009)

The relevant recipient created tax invoice fact sheets on this website are currently being updated to reflect the legislative instrument.

Last Modified: Wednesday, 1 July 2009