Tax invoices

When to provide a tax invoice

If a customer asks for a tax invoice, you must provide one within 28 days, unless it is for a sale of $82.50 (including GST) or less.

The information a tax invoice must include depends on:

• the sale amount
• the sale type (for example, a sale that includes both taxable and non-taxable items)
• who issues the tax invoice.

Sales under $1,000

Tax invoices for taxable sales of less than $1,000 must include enough information to clearly determine the following 7 details:

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

Sales of $1,000 or more

Tax invoices for sales of $1,000 or more also 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 2 shows:

• GST included in each line item
• the sale is clearly identified as being fully taxable by the words 'Total price includes GST'
• the buyer's identity for sales of $1,000 or more.

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 claim GST credits and for it to be considered a valid tax invoice.

GSTR 2013/1 Goods and services tax: tax invoices sets out the information requirements for a tax invoice in more detail.

Taxable and non-taxable sales

A tax invoice that includes taxable and non-taxable items, must clearly show which items are taxable. Items are non-taxable if they are GST-free or input-taxed. The tax invoice must also show:

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

Use ASIC's MoneySmart GST calculatorExternal Link to calculate the amount of GST you will pay or should charge customers.

GST 2001/8 Goods and services tax: Apportioning the consideration for a supply that includes taxable and non-taxable parts provides more detail about apportioning.

eInvoicing and digital invoices

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

For example, you can issue a tax invoice to a customer by:

• using eInvoicing (Peppol eInvoice), an automated direct exchange of invoices between a supplier's and buyer's software
• emailing an invoice in portable document format (PDF).

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

The Peppol eInvoicing standard can be used to issue an invoice that meets legal requirements. However, it does not guarantee or enforce compliance because requirements vary based on business scenarios. It is the trading entity's obligation to understand and comply with the legal requirements and the digital record keeping rules for business.

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 2 rules known as the total invoice rule and the taxable supply rule.

Total invoice rule – total and then round GST for each taxable sale to the nearest cent (rounding 0.5 cents upwards).

Or if all taxable sales on a tax invoice include an amount of GST exactly 1/11 of the price, 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 sale rule – 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, round up or down as appropriate. Then 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. For more information see 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 at the time the RCTI is issued
• 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 Commissioner has determined that the type of goods or services sold under the agreement can be invoiced using an RCTI.

Use the Recipient Created Tax Invoice Determination 2023 to find out what goods and services you can issue an RCTI for.

The determination also outlines requirements that you must include in the written agreement between you and the supplier.

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

Use the Recipient-created tax invoices form as a template for creating RCTIs, or as a reference for information you need to create your own RCTI.

See GSTR 2000/10 Goods and services tax: recipient created tax invoices for more information about RCTIs.

When an RCTI is valid

To be valid, an RCTI must contain enough 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.

It must also show the suppliers and purchaser's 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:
  • date of the sale
  • date the value of the sale is determined by you
   
• retain the original or a copy of the RCTI
• reasonably comply with your obligations under the tax laws.
• stop issuing RCTIs if any of the requirements for issuing RCTIs are no longer met.

GST groups

If a member of a GST group makes a taxable sale, their identity must be clear on the tax invoice.

If the recipient is a member of a GST group, the buyer's identity must be clearly shown to satisfy the requirement. Include one of the following in the tax invoice:

• the recipient
• the GST group
• the representative member
• another member of the GST group (where there would still be a creditable acquisition if the supply been made to that member).

Multiple recipients or co-owners

On a single tax invoice for a taxable sale (for $1,000 or more) to more than one recipient, you must clearly show either:

• the identity of each recipient
• the ABN of each recipient.

On a single tax invoice for a taxable sale made by more than one entity (for example, co-owners of property), you must clearly show either:

• the identity and ABN of each co-owner
• the identity and ABN of one co-owner acting as 'agent co-owner' for the other.

When co-owners receive a tax invoice for a sale (for $1,000 or more), the tax invoice must clearly show either:

• the identity of each co-owner
• the ABN of each co-owner.

Explains when to provide a tax invoice, what it must include and dealing with non-taxable sales and rounding.