Tax Invoice Requirements

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.