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Date of advice: 16 November 2017
Subject: GST and tax invoices
Will the electronic document provided satisfy the requirements of a valid tax invoice pursuant to subsections 29-70(1) and (1A) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Yes, provided it can clearly be ascertained that the information shown on the draft tax invoice includes the words “Supplier’s ABN” and is immediately followed by the ABN of the supplier. The word ‘ABN’ is required on the tax invoice for it to be compliant.
Relevant facts and circumstances
Entity 1 is a subsidiary of Entity 2, and is authorised and licensed by its parent to sell electronic services in Australia to Australian based customers.
Via the server customers can browse and purchase goods and services from an online marketplace.
The suppliers listed on the online marketplaces are identified as being:
● Australian residents;
● having an active Australian Business Number (ABN); and
● being registered for GST in Australia.
The online market only concerns itself with business-to-business (B2B) services, where both supplier and customer are residents of Australia and registered for Australian GST. That is, within Australia, only allowing “in-country” supplies where only in-country ‘ship to’ and ‘ship from’ marketplace listings are eligible for purchase.
Entity 1 provides a technology platform which enables the purchasers to generate the electronic document, amongst other things.
The electronic document outlines the following information:
● status of the invoice (i.e. sent);
● invoice number;
● invoice date;
● original purchase order;
● source documents;
● price and GST information in Australian dollars, including:
● subtotal of purchase;
● total GST;
● total shipping;
● total gross amount;
● total net amount;
● amount due.
● customer identification and address;
● supplier identification and ABN;
● quantity of units purchased of a good;
● description of goods purchased; and
● the words ‘Tax Invoice’.
The purchaser is able to download the electronic document.
The GST amount applicable to each supply is shown on the electronic document.
The participating supplier’s agree to the electronic document being issued as a tax invoice on their behalf, by agreeing to participate in the arrangement.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 29-70.
Reasons for decision
Subsections 29-70(1) and (1A) of the GST Act provide:
29-70 Tax invoices
(1) A tax invoice is a document that complies with the following requirements:
(a) it is issued by the supplier of the supply or supplies to which the document relates, unless it is a recipient created tax invoice (in which case it is issued by the recipient);
(b) it is in the approved form;
(c) it contains enough information to enable the following to be clearly ascertained:
(i) the supplier's identity and the supplier's ABN;
(ii) if the total price of the supply or supplies is at least $1,000 or such higher amount as the regulations specify, or if the document was issued by the recipient - the recipient's identity or the recipient's ABN;
(iii) what is supplied, including the quantity (if applicable) and the price of what is supplied;
(iv) the extent to which each supply to which the document relates is a taxable supply;
(v) the date the document is issued;
(vi) the amount of GST (if any) payable in relation to each supply to which the document relates;
(vii) if the document was issued by the recipient and GST is payable in relation to any supply - that the GST is payable by the supplier;
(viii) such other matters as the regulations specify;
(d) it can be clearly ascertained from the document that the document was intended to be a tax invoice or, if it was issued by the recipient, a recipient created tax invoice.
(1A) A document issued by an entity to another entity may be treated by the other entity as a tax invoice for the purposes of this Act if:
(a) it would comply with the requirements for a tax invoice but for the fact that is does not contain certain information; and
(b) all of that information can be clearly ascertained from other documents given by the entity to the other entity.
Paragraph 12 of Goods and Services Tax Ruling GSTR 2013/1Goods and services tax: tax invoices provides that a document in electronic form that meets the requirements of subsection 29-70(1) will be in the approved form for a tax invoice.
The electronic document is generated on an electronic platform by the purchaser, and provided to the purchaser.
GSTD2005/2 Goods and Services Tax Determination: is an invoice that is posed on a website ‘issued’ for the purposes of Division 29 of the A New Tax System (Goods and Services Tax) 1999 (GSTD 2005/2) outlines that an invoice is considered to be ‘issued’ for the purposes of Division 29 of the GST Act when it is posted on a website, provided that:
● the invoice is posted in an area that is readily accessible by the entity to whom the invoice is to be issued;
● the invoice can be downloaded or printed in a readable format by the entity; and
● the entity has been informed that the invoice has been posted on the website, for example, by email, or is aware by arrangement or agreement that invoices will be posted on the website.
GSTD 2005/2 further states that a tax invoice can be issued in electronic form, for example, by electronic data interchange (EDI).
GSTD 2005/2 outlines that the supplier and the recipient may have an arrangement or agreement that the recipient will access the website, either at the recipient’s convenience or periodically, to download or print invoices posted on the website, where the recipient is usually required to log onto a website, enter a password to access the invoice. The arrangement or agreement may be contained in the terms of trade, letters, emails or file notes.
The electronic that is generated by recipients is an electronic document satisfying the definition of an EDI.
Users must agree to the terms and conditions of use, instructions for use of the software is provided to the user. The recipient terms, conditions and instructions include information to generate the electronic document for the respective purchase. Upon acceptance of the terms and conditions and access to instructions, the recipient enters into an arrangement with Entity 1.
The electronic document is not issued by the supplier of the supply, rather the electronic is generated by the purchaser in the network online portal. Entity 1 is not the supplier of the goods, it is merely providing a technology platform for users.
ATO Interpretative Decision ATO ID 2010/146 Goods and Services Tax: GST and tax invoices issued by another entity on behalf of a supplier (ATO ID 2010/146) considers where an entity, that is not the supplier, prepares and issues a tax invoice. The facts outlined are:
● Entity A and Entity B have entered into a written agreement for the preparation and issuance of tax invoices;
● Under this agreement, Entity B prepares and issues a single tax invoice on behalf of Entity A and for itself for the taxable supplies that each entity makes to the same customer;
● Entity A does not issue its own tax invoice in respect of the taxable supplies that it makes;
● Entity A’s identity and ABN appears on the tax invoice issued by Entity B;
● The tax invoice satisfies the requirements for a tax invoice as set out in paragraphs
29-70(1)(b), 29-70(1)(c) and 29-70(1)(d).
Paragraph 5 of GSTD 2005/2 states that when referring to an invoice, the Determination is equally referring to an invoice prepared by a third party who is authorised to determine and notify an amount payable by one party to another.
The electronic document is a document that is prepared and generated by a party that is not the supplier of the transaction, being Entity 1. Both supplier, by participating in the arrangement, and recipient agree to the terms and conditions of use of the system, authorising Entity 1 to facilitate and notify the appropriate parties the amount payable by way of a tax invoice. The electronic document is therefore a tax invoice pursuant to section 29-70(1A) of the GST Act.
The electronic document will satisfy subsection 29-70 of the GST Act and be a valid tax invoice. As the tax invoice will be issued through the online platform under agreement with the supplier for the supply or supplies that the supplier makes, by participating in the arrangement, it is in the approved form as it will contain the supplier’s ABN (including identifying that it is an ABN), it will identify the recipient, it will include a description of the goods supplied, the quantity and price of the what is supplied, it will include if the supply or supplies are taxable, the date of the document, the total amount of GST, the words ‘Tax Invoice’ so it can be clearly ascertained from the document that it is intended to be a tax invoice.