A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 12) 2000

Overview

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 12) 2000 was enacted to address the gap in the ability of certain entities to issue tax invoices for goods and services supplied under specific circumstances, particularly in relation to loyalty program participation. The legislation was introduced to clarify and expand the types of entities that can issue tax invoices when they are the recipients of the supply, ensuring compliance with the Goods and Services Tax (GST) framework. This determination was made under the authority of the Commissioner of Taxation pursuant to subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999 and subsection 4(1) of the Acts Interpretation Act 1901. The primary policy objective is to facilitate the accurate and timely issuance of tax invoices by recipients in cases where the supplier does not issue one, thereby maintaining the integrity of the GST system. This determination ensures that retail associations or groups can issue tax invoices for taxable supplies related to loyalty program participation, provided they meet the specified criteria and obligations.

Scope and Application

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 12) 2000 applies to entities that are not previously determined to be capable of issuing tax invoices belonging to specific classes. This includes retail associations or groups that are recipients of a taxable supply related to loyalty program participation. Such entities must comply with specific conditions to issue a tax invoice, including being registered for GST, setting out the supplier's ABN, and meeting the requirements outlined in Clause 5. The determination sets out the requirements that must be satisfied by the recipient of a taxable supply, such as issuing the original or a copy of the tax invoice and adjustment notes to the supplier within a specified timeframe, and having a written agreement with the supplier. The application of this determination extends to entities operating within the scope of the A New Tax System (Goods and Services Tax) Act 1999 and is subject to amendments made by subsequent legislative instruments, such as the Recipient Created Tax Invoice – Embedded Agreement Amending Legislative Instrument 2009.

Key Provisions

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 12) 2000, as amended, provides specific provisions concerning the issuance of tax invoices by recipients of taxable supplies, particularly those related to loyalty program participation. According to section 4, a tax invoice that belongs to a class of tax invoices for a taxable supply of loyalty program participation may be issued by a retail association or group that is the recipient of that supply, provided they establish the value of the participation after the supply is made and satisfy the requirements outlined in section 5. Section 5 details the obligations that recipients must meet, which include being registered for GST, including the supplier’s ABN on the tax invoice, issuing the tax invoice within 28 days of determining the supply's value, complying with taxation laws, and having a written agreement or an embedded agreement with the supplier specifying that the recipient can issue tax invoices for the supply and the supplier will not issue them. The written agreement must be current and effective when the tax invoice is issued, or the agreement must be embedded in the tax invoice itself. Entities governed by this determination have several obligations and requirements they must adhere to. Primarily, as per section 5(a), the recipient must be registered for GST when the tax invoice is issued. They must also include the supplier’s ABN on the tax invoice, as mandated in section 5(b). Furthermore, the recipient must issue the original or a copy of the tax invoice to the supplier within 28 days of making or determining the value of the taxable supply, as stipulated in section 5(c). Additionally, the recipient must issue an adjustment note within 28 days of any adjustments made to the supply, retaining the original or a copy of this note, as per section 5(d). The recipient must reasonably comply with all obligations under the taxation laws, ensuring they maintain records and provide accurate information, as stated in section 5(e). Finally, the recipient must have either a written agreement or an embedded agreement with the supplier, as specified in section 5(f), confirming that the recipient can issue tax invoices for the supply and the supplier will not issue them. The determination also outlines the consequences for non-compliance. Under section 5(g), the recipient is prohibited from issuing a document that would otherwise be a recipient created tax invoice if either party fails to comply with any of the requirements of this determination. Breach of these obligations could lead to various civil and criminal penalties under the A New Tax System (Goods and Services Tax) Act 1999. For instance, failure to include accurate information on a tax invoice or to issue one within the specified timeframe could result in penalties. Additionally, if the recipient issues an incorrect tax invoice deliberately, they could face criminal charges, which may include fines and imprisonment, as stipulated in the Act. The precise penalties depend on the nature and severity of the breach but can be substantial, reflecting the seriousness of tax evasion and non-compliance.