Have you ever wondered what needs to be included in a Tax Invoice? The ATO provides some very clear guidelines on what needs to be included - especially if you are invoicing from an entity that is registered for GST. Where an entity is registered for GST and makes a taxable supply, it must provide a tax invoice (s 29-70, GST Act).
Section 29-70(2) of the GST Act specifies that a supplier must issue a tax invoice within 28 days of the date of sale for all supplies with a total GST-exclusive price exceeding $75 (ie $82.50 inclusive of GST).
According to s 29-70(1) of the GST Act, a tax invoice is required to include the following:
that it is issued by the supplier (except for recipient created tax invoices)
it must be in the approved form
that the document is intended as a tax invoice (usually with the words “tax invoice” clearly displayed)
the supplier’s identity (eg its legal name, business name or trading name)
the supplier’s ABN
the date the tax invoice was issued
a brief description of what is sold, including the quantity (if applicable) and the price of what is sold
the GST amount (if any) payable in relation to the sale — this can be shown separately or, if the GST to be paid is exactly 1/11th of the total price, as a statement such as “total price includes GST”, and
the extent that each sale to which the document relates is a taxable sale.
Where the price of the supply is $1,000 or more (including GST), the tax invoice must also include the buyer’s identity or ABN. The GST included in the price can either be shown separately or must contain a statement stating that the amount payable is inclusive of GST.
If an entity provides either a tax invoice or invoice without a valid 11-digit ABN, then the payer is required to withhold 49% of the gross payment and remit this amount to the ATO on its next BAS. This is referred to as “ABN withholding tax”. This applies in all cases, unless:
the supplier is not entitled to an ABN as they are not carrying on an enterprise in Australia
they are an individual under 18 years and the payment does not exceed $350 per week
the payment does not exceed $75, excluding any GST
they are an individual or a partnership without a reasonable expectation of profit or gain
the supply that the payment relates to is wholly input taxed
the whole of the payment is exempt income of the supplier, or
the supplier is an individual and has given the payer a written statement in the ATO approved “Statement by a Supplier” form which states that the supply is either: – made in the course or furtherance of an activity done as a private recreational pursuit or hobby, or – wholly of a private or domestic nature (from the supplier’s perspective).
The “Statement by a Supplier” form can be downloaded from the ATO’s website.