• Issuing and receiving tax invoices

    Tax invoices are an important part of the GST system. To claim a GST credit you must be registered for GST and have a tax invoice (or recipient-created tax invoice) for purchases that cost more than $82.50 (including GST).

    If you make taxable supplies (for example, you are an owner supplying your horse to race), you must issue a tax invoice within 28 days if the recipient of your supply (such as a racing body) requests one. You should keep a copy of all tax invoices that you issue to help you prepare your activity statements.

    If you are a racing body and you make sales to a participant (for example, an owner or trainer) for which you charge a fee, these sales should be included in a tax invoice you issue to the recipient. For example, you may provide entry into a race in exchange for nomination and acceptance fees. These charges will be included in the tax invoice that you issue to the owner of the racing animal.

    Recipient-created tax invoices

    In certain circumstances, the racing body may issue you with a recipient-created tax invoice (RCTI). These are tax invoices you receive for services you supply to the racing body.

    Racing bodies may only issue RCTIs if:

    • both you and the racing body are registered for GST at the time the RCTI is issued
    • there is a written agreement between you and the racing body specifying the sales to which the agreement relates and agreeing that the racing body can issue the RCTI, and
    • you, as the supplier, do not issue tax invoices for the sales specified in the agreement.

    If you are not required to be registered for GST (for example, your activities are a hobby), the racing body will issue you with details of the prize money you have won in a statement or remittance advice. This document is not an RCTI.

    End of attention

    Supplies you receive from a racing body (for example, entry into a race on payment of a nomination or acceptance fee) cannot form part of an RCTI the racing body issues to you. These supplies must be listed in a tax invoice issued by the racing body.

    The types of supplies that may appear on an RCTI include:

    • supplies of an animal to race for which prize money or an unplaced starter's rebate is paid to an owner
    • supplies by a trainer for which the trainer receives their percentage of prize money
    • supplies by a jockey or driver for which they receive a riding/driver fee or their percentage of prize money.

    Example: RCTI issued by racing body

    Phil is registered for GST in relation to his racing activities. He enters a horse into a race and pays the nomination fee of $110. The horse wins the race and Phil receives prize money of $2,200. Both of these transactions occur within the same tax period and these are the only transactions for Phil in this tax period. Phil has an RCTI written agreement with the racing body.

    Phil cannot issue a tax invoice for these transactions. The racing body will issue an RCTI and will separately identify the transactions. Phil must account for GST of $200, that is, one-eleventh of the $2,200 prize money. Phil is entitled to a GST credit of $10, that is, one-eleventh of the $110 nomination fee.

    End of example

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      Last modified: 24 May 2014QC 18093