Tax invoice requirements have changed – is your business compliant?
Changes to tax invoices and recipient created tax invoices (RCTIs) were introduced on 1 July 2010 in order to simplify the requirements for a document to be a tax invoice. A document may be considered to be a tax invoice, or RCTI, if it is issued by the supplier (or recipient for RCTIs) in the approved form. It must contain sufficient information to enable the following key items to be readily identified:
• the supplier’s identity and Australian Business Number (ABN)
• the nature of the sale
• the amount of GST payable.
However, if you receive a document from a supplier (or recipient for RCTI) that is missing key information, you may still be able to treat the document as a tax invoice, or RCTI, if:
• the document makes clear that it is intended as a tax invoice, or RCTI, and
• the missing information can be obtained from other documents issued by the supplier (or recipient).
Changes to tax invoices
Requirements for the content of tax invoices are less prescriptive and more flexible than they previously were. This means that documents containing minor errors may still be able to be treated as tax invoices. This reduces the costs of additional follow up with suppliers.
Where you receive a document from a supplier that is missing key information, you may still treat the document as a tax invoice under certain circumstances. It must be clear that the document is intended to be a tax invoice and you must be able to clearly ascertain the missing information from other documents issued by that supplier. This concession does not apply to adjustment notes or recipient created adjustment notes. Suppliers are still required to provide a tax invoice to recipients, when requested.
Changes to RCTIs
Requirements for the content of RCTIs have been relaxed in line with those for tax invoices. Therefore, costs associated with pursuing recipients where tax invoices contain minor errors should be reduced.
However, the following special requirements apply and must be able to be clearly ascertained from the document:
• the identity or Australian Business Number (ABN) of the recipient of the supply
• that the supplier is liable for any GST payable.
The concession regarding missing information also applies to RCTIs for suppliers, but not recipients.
What are the changes to tax invoices for members of GST groups?
A document may be considered a tax invoice, even if it does not identify the exact recipient of the supply, if it identifies either:
• the GST group
• the representative member or another member of the GST group to which the recipient belongs.
However, the recipient of the supply can still ask a supplier to provide a tax invoice which identifies the actual recipient. These new amendments also apply to tax invoices issued by agents acting for suppliers and documents received by agents acting for purchasers.
If your business is in compliance with the previous law you are not required to make any changes to your existing systems as a result of these amendments. Tax invoices complying with the previous guidelines will continue to be considered valid tax invoices.
Here at The Quinn Group our experienced team of lawyers, accountants and tax agents can assist you in making sure your business’ invoicing is in compliance with the new laws. For more information or for any other tax enquiries submit an online enquiry. Alternatively, contact us on 1300 QUINNS (784 667) or on +61 2 9223 9166 to book an appointment.