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Ruling
Subject: GST and tax invoices
Question
Will Entity A be required to display its Australian Business Number (ABN), Entity B's ABN or possibly both on the relevant material?
Answer
See reasons for decision.
Relevant facts and circumstances
Entity A was established to do certain things and entered into service agreements with Entity B, rely on Entity B doing particular things. The material will be co-branded with Entity B and Entity A information.
Entity B are required to display their ABN on certain material. Reason being Entity B acts on behalf of Entity C as part of the process.
Where Entity B facilitates a supply on behalf of Entity A the fees and charges are not subject to GST whereas the supply they facilitate on behalf of Entity C is a taxable supply. The material issued on behalf of Entity C then serves as a tax invoice for the customer and accordingly is required to display Entity B's ABN.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 29-70.
Reasons for decision
A recipient of a supply must hold a tax invoice to substantiate a claim for an input tax credit for a creditable acquisition made in a particular tax period where they have an entitlement.
However, there are circumstances in which it is not necessary for the supplier to issue a tax invoice, such as where the value of the taxable supply is $75 or less or such higher amount as the regulations specify. For example, value of $75 corresponds with a price of $82.50.
A tax invoice is a document that is required to contain, amongst other things, the identity and ABN of the supplier (subparagraph 29-70(1)(c)(i) of the GST Act).
Subdivision 153-A has special rules about tax invoices and agents. It reflects the position at common law that when an agent uses his or her authority to act for a principal, then any act done on behalf of that principal is an act of the principal. An entity therefore makes a supply or acquisition if their agent makes it on their behalf.
If a principal makes a taxable supply through an agent, either the principal or the agent may issue a tax invoice in relation to the supply.
In your circumstance where an entity acts as agent or principal in making a taxable supply the entity needs to include either the agent's or principal's ABN.
Therefore, in the circumstance that Entity B, as agent, is making a taxable supply on behalf of a principle the recipient, where they are entitled to an input tax credit, will be required to hold a tax invoice, provided the value of the supply is greater than $75. In this situation the ABN on the tax invoice issued by Entity B for Entity C can be Entity B's ABN or the Entity C's ABN.
Furthermore, as the supplies that Entity B provide on behalf of Entity A are not taxable supplies there is no requirement under the GST Act that tax invoices be issued, as such there is no requirement that Entity A's ABN be listed on a tax invoice.