A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 32) 2000

Overview

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 32) 2000, as amended, was enacted under the authority of the Australian Government and serves to provide specific guidelines on who can issue tax invoices in the context of the Goods and Services Tax (GST) system. This legislative instrument addresses the problem of ensuring that only entities appropriately authorised by the Commissioner of Taxation can issue tax invoices that meet the stringent requirements set out under the GST Act. It is designed to ensure that tax invoices, which are essential for the accurate reporting and compliance with GST obligations, are only issued by entities that have fulfilled all necessary conditions, thereby maintaining the integrity of the tax system. The policy objective of this determination is to establish clear criteria for entities that can issue recipient created tax invoices (RCTIs), particularly focusing on publishers who receive taxable supplies and engage in the sale of books via commission agents to retailers. The determination outlines specific requirements, such as the need for the recipient to be registered for GST, the necessity of including the supplier's ABN on the tax invoice, and the requirement of having a written or embedded agreement with the supplier. This legislative instrument was prepared by the Goods and Services Tax Centre of Expertise within the Australian Taxation Office and is subject to amendments to ensure its continued relevance and effectiveness within the GST framework.

Scope and Application

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 32) 2000 applies to entities that are recipients of a taxable supply and have not been previously determined as eligible to issue a tax invoice belonging to a specific class of tax invoices that may be issued by the recipient. Specifically, it applies to publishers who are recipients of a taxable supply, permitting them to issue a tax invoice for a supply of books by commission agents to retailers under certain conditions. These publishers must establish the value of the taxable supply based on a percentage of the price of the goods supplied to the retailers. The application of this determination is governed by federal law, commencing from the date the A New Tax System (Goods and Services Tax) Act 1999 commences, and it does not revoke or vary any previous determination made by the Commissioner. The recipient must satisfy various requirements to be eligible, including being registered for GST, setting out the supplier's ABN in the tax invoice, issuing the tax invoice or an adjustment note within 28 days, complying with taxation laws, and having a written agreement with the supplier or an embedded agreement in the recipient created tax invoice. Additionally, publishers who have been carrying on their enterprise for less than 12 months must notify the Commissioner of their intention to use recipient created tax invoices.

Key Provisions

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 32) 2000 sets out the specific circumstances under which a recipient, such as a publisher, can issue a tax invoice for a taxable supply of books. Section 4 identifies that a publisher who is the recipient of a taxable supply may issue a tax invoice if they establish the value of the supply based on a percentage of the price of the goods supplied to retailers and satisfy the requirements set out in Clause 5. Clause 5 details the conditions that must be met by the recipient, including being registered for GST, setting out the supplier's ABN in the tax invoice, issuing the original or a copy of the tax invoice to the supplier within 28 days of making the supply, and ensuring compliance with taxation laws. Additionally, the recipient must either have a written agreement with the supplier or an agreement embedded in the tax invoice itself, specifying that the recipient can issue tax invoices for the supplies and that the supplier will not do so. The obligations imposed on the parties governed by this determination are comprehensive. The recipient must ensure they are registered for GST, accurately reflect the supplier's ABN, issue the tax invoice or an adjustment note within 28 days of the supply or any adjustments, and maintain records of these documents. The recipient also needs to have a written agreement with the supplier or an embedded agreement in the tax invoice, confirming that the recipient can issue tax invoices and that the supplier will not. If the recipient has been carrying on their enterprise as a publisher for less than 12 months, they must notify the Commissioner in writing of their intention to use recipient created tax invoices within 14 days of issuing the first such invoice. Failure to comply with any of these requirements can result in the recipient being unable to issue a document that would otherwise be a recipient created tax invoice. For breaches of the requirements set out in this determination, the A New Tax System (Goods and Services Tax) Act 1999 provides for both civil and criminal penalties. Civil penalties can include fines, with the exact amount determined by the severity of the breach and other factors. Criminal penalties may also apply, and the Act outlines various offences with their corresponding maximum penalties. For example, knowingly providing false or misleading information on a tax invoice can result in fines and imprisonment. The penalties underscore the importance of compliance with the provisions of this determination to avoid legal repercussions.