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  • Tax invoices

    When you make a taxable sale of more than $82.50 (including GST), your GST-registered customers need a tax invoice to claim a credit for the GST in the purchase price.

    If a customer asks you for a tax invoice you must provide one within 28 days of their request.

    Tax invoices must include at least seven pieces of information. There are additional requirements for:

    Requirements of tax invoices

    Tax invoices for taxable sales of less than $1,000 must include enough information to clearly determine the following seven details:

    1. that the document is intended to be a tax invoice
    2. the seller's identity
    3. the seller's Australian business number (ABN)
    4. the date the invoice was issued
    5. a brief description of the items sold, including the quantity (if applicable) and the price
    6. the GST amount (if any) payable – this can be shown separately or, if the GST amount is exactly one-eleventh of the total price, such as a statement which says 'Total price includes GST'
    7. the extent to which each sale on the invoice is a taxable sale (that is, the extent to which each sale includes GST).  

    Tax invoices for sales of $1,000

    Tax invoices for sales of $1,000 or more need to show the buyer's identity or ABN.

    If your tax invoices meet the requirements for sales of $1,000 or more, you can also use them for sales of lesser amounts.

    Example 1: Tax invoice for a sale under $1,000

    Example1: Tax invoice for a sale under $1,000. This meets the requirement because it shows:  - Tax invoice (heading) - Windows to Fit Pty Ltd (seller's identity) - ABN 32 123 456 789 - Date: 1 August 2018 - Description of supply -  Window frames - The total price

    End of example

    Example 1 shows this requirement because the sale is clearly identified as being fully taxable by the words Total price including GST.

    Example 2: Tax invoice for a sale of more than $1,000

    Example 2: Tax invoice for a sale of more than $1,000. This meets the requirement because it shows:  - Tax invoice (heading) - Windows to Fit Pty Ltd (seller's identity) - ABN 32 123 456 789 - Building Company 15 Burshag Rd Festler NSW 2755  - Date: 1 August 2013 - Description of supply -  50 window frames unit price $150 GST $15 Total $8,250 10 deadlocks unit price $40 GST $4 Total $440 - Total amount payable $8,690 - The total price includes GST

    End of example

    Example 2 shows the GST included in each line item (see column with the GST amount), and the sale is clearly identified as being fully taxable by the words 'Total price includes GST'.

    If you supply or receive an invoice that only has a figure at a wine equalisation tax-goods services tax (WEG) label, you need further information to be able to claim GST credits and for it to be considered a valid tax invoice.

    See also:

    Taxable and non-taxable sales

    A tax invoice that includes taxable and non-taxable items that are either GST-free or input-taxed, must clearly show which items are taxable. In addition, the tax invoice must also show:

    • each taxable sale
    • the amount of GST to be paid
    • the total amount to be paid.

    See also:

    E-invoicing

    Digital and electronic invoices

    A tax invoice doesn't need to be issued in paper form.

    For example, you can issue a tax invoice to a customer via an electronic invoice (e-invoice), which is an automated direct exchange of invoices between a supplier's and buyer's software systems, or by emailing an invoice in portable document format (PDF).

    The record transmitted to the customer need to contain all information required for a tax invoice.

    See also:

    Rounding of GST

    Where an amount of GST includes a fraction of a cent, special rounding rules apply.

    Where there is only one taxable sale on a tax invoice, the amount of GST should be rounded to the nearest cent (rounding 0.5 cents upwards).

    Where there is more than one taxable sale on a tax invoice, there are two rules known as the 'total invoice rule' and the taxable supply rule:

    • Total invoice rule – under this rule, the unrounded amounts of GST for each taxable sale should be totalled and then rounded to the nearest cent (rounding 0.5 cents upwards).

    Alternatively, if all the taxable sales on a tax invoice include an amount of GST that is exactly 1/11 of the price, you may choose to add up the GST-exclusive value of each taxable sale, calculate GST on that amount and then round to the nearest cent (rounding 0.5 cents upwards).

    • Taxable supply rule – under this rule, you need to work out the amount of GST for each individual taxable sale. Where the unrounded amount of GST has more decimal places than your accounting system can record, the amount should be rounded up or down as appropriate. You then need to add the individual amounts and round this total to the nearest cent (rounding 0.5 cents upwards).

    You and your customers don't need to use the same rounding rules.

    Agency relationships

    Special rules apply to tax invoices for transactions carried out through agents.

    See also:

    • GSTR 2000/37 Goods and services tax: agency relationships and the application of the law

    Recipient-created tax invoices

    In most cases, tax invoices are issued by a supplier. However, in special cases, you, as the purchaser or recipient of the goods or services, may issue a tax invoice for your purchases. This is known as a recipient-created tax invoice (RCTI).

    When you can issue an RCTI

    You can issue an RCTI if:

    • you and the supplier are both registered for GST
    • you and the supplier agree in writing that you may issue an RCTI and they will not issue a tax invoice
    • the agreement is current and effective when you issue the RCTI
    • the goods or services being sold under the agreement are of the type that we have determined can be invoiced using an RCTI.

    Your written agreement can either be a separate document specifying the supplies, or you can embed this information or specific terms in the tax invoice.

    See also:

    When an RCTI is valid

    To be valid, an RCTI must contain sufficient information to clearly determine the requirements of tax invoices and show the document is intended to be a recipient-created tax invoice, not a standard tax invoice.

    In addition it must detail the purchaser's identity or ABN.

    If GST is payable, it must also show that it's payable by the supplier.

    As the recipient, you must:

    • issue the original or a copy of your RCTI to the supplier within 28 days of one of the following dates  
      • the date of the sale
      • the date the value of the sale is determined
       
    • retain the original or a copy of the RCTI
    • comply with your obligations under the tax laws.

    You will need to stop issuing RCTIs once any of the requirements for issuing RCTIs are no longer met.

    See also:

    GST groups

    If a member of a GST group makes a taxable supply, the identity of that member must be clear from the document.

    If the recipient is a member of a GST group, the requirement that the buyer's identity be clearly shown will be satisfied if the document contains sufficient information to clearly show the identity of:

    • the recipient
    • the GST group
    • the representative member
    • another member of the GST group (where there would still be a creditable acquisition had the supply been made to that member). 
    Last modified: 04 Apr 2019QC 22438