A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 37) 2000

Administered by Department of the Treasury

Legislation au F2005B02758 Not in force Legislative Instrument

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A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 37) 2000

 

as amended

made under 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.

This compilation was prepared on 18 May 2009
taking into account amendments up to Recipient Created Tax Invoice – Embedded Agreement Amending Legislative Instrument 2009

Prepared by the Goods and Services Tax Centre of Expertise,
Australian Taxation Office

 

Citation (see Note 1)

  1. This determination may be cited as the A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 37) 2000. 

Commencement (see Note 1)

2.                  (a) This determination commences on 29th September 2000.

(b) This determination does not revoke or vary any previous determination made by the Commissioner.

Application of determination

3.                  This determination applies to an entity not determined previously as being able to issue a tax invoice belonging to a class of tax invoices that may be issued by a recipient.

Classes of Tax Invoices that may be issued by the recipient of a taxable supply

A tax invoice that belongs to a class of tax invoices for a taxable supply of renting may be issued by the recipient of that taxable supply where the recipient:

(i)                 establishes the value of that supply after the supply is made using a sales based calculation process; and

(ii) satisfies the requirements set out in Clause 5.

Requirements that must be satisfied by a recipient of a taxable supply

5. A recipient must satisfy the following requirements:

(a) the recipient must be registered for GST when the invoice is issued;

(b) the recipient must set out in the tax invoice the ABN of the supplier;

(c) 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 a taxable supply and must retain the original or the copy;

(d) the recipient must issue the original or a copy of an adjustment note to the supplier within 28 days of the adjustment and must retain the original or the copy;

(e)               the recipient must reasonably comply with its obligations under the taxation laws;

(f)                 the recipient must have either:

  • a written agreement with the supplier specifying the supplies to which it relates, that is current and effective when the RCTI is issued, agreeing that:

(i)                 the recipient can issue tax invoices in respect of the supplies;

(ii)                the supplier will not issue tax invoices in respect of the supplies;

(iii)              the supplier acknowledges that it is registered for GST when it enters into the agreement and that it will notify the recipient if it ceases to be registered; and

(iv)             the recipient acknowledges that it is registered when it enters into the agreement and that it will notify the supplier if it ceases to be registered for GST; or

  • an agreement with the supplier embedded in an RCTI it issues that contains the following statement:

The recipient and the supplier declare that this agreement applies to supplies to which this tax invoice relates. The recipient can issue tax invoices in respect of these supplies. The supplier will not issue tax invoices in respect of these supplies. The supplier acknowledges that it is registered for GST and that it will notify the recipient if it ceases to be registered. The recipient acknowledges that it is registered for GST and that it will notify the supplier if it ceases to be registered for GST. Acceptance of this RCTI constitutes acceptance of the terms of this written agreement.

Both parties to this supply agree that they are parties to an RCTI agreement. The supplier agrees to notify the recipient if the supplier does not wish to accept the proposed agreement within 21 days of receiving this document.

(g)               the recipient must not issue a document that would otherwise be a recipient created tax invoice, on or after the date when the recipient or the supplier has failed to comply with any of the requirements of this determination;

(h)               if the recipient has a current GST turnover of less than $1,000,000, it must notify the Commissioner in writing of the recipient's intention to use recipient created tax invoices.  This notification must be made before 14 days have elapsed after the first occasion that a recipient created tax invoice is issued by that recipient.

Definitions

6. The following expressions are defined for the purposes of this determination:

renting means the process of making a supply by way of rental or lease;

sales based calculation process means a process whereby the value of the rental or lease payment is based on a further supply by the recipient to third parties (for example a percentage of sales achieved).

7. Other expressions in this determination have the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999.

 

Notes to the A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 37) 2000

Note 1

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 37) 2000 (in force under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999) as shown in this compilation is amended as indicated in the Tables below.

Table of Instruments

Title

Date of FRLI registration

Date of
commencement

A New Tax System (Goods and Services Tax) 1999 Classes of Recipient Created Tax Invoice Determination (No. 37) 2000

see F2005B02758

29 September 2000

Recipient Created Tax Invoice - GST Terminologies Amending Legislative Instrument 2007

22 May 2007

(see F2007L01466)

21 June 2007

Recipient Created Tax Invoice – Embedded Agreement Amending Legislative Instrument 2009

14 May 2009

(see F2009L01772)

1 July 2009

Table of Amendments

ad. = added or inserted      am. = amended      rep. = repealed      rs. = repealed and substituted

Provision affected

How affected

Clause 5

am. (F2007L01466)

Clause 5

am. (F2009L01772)

 

Overview

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 37) 2000 was enacted to address the need for flexibility in the issuance of tax invoices under the Australian Goods and Services Tax (GST) system. This legislative instrument, created under the authority of the A New Tax System (Goods and Services Tax) Act 1999 and the Acts Interpretation Act 1901, aims to provide specific conditions under which a recipient of a taxable supply may issue a recipient-created tax invoice (RCTI). This was necessary to accommodate situations where the supplier was either unable or unwilling to issue the tax invoice, particularly in scenarios involving rental or leasing services where the value of the supply is determined post-transaction through a sales-based calculation process. The objective is to ensure compliance with GST regulations while offering practical solutions for businesses engaged in such transactions.

Scope and Application

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 37) 2000 applies to entities not previously determined as capable of issuing a tax invoice belonging to a class of tax invoices that may be issued by a recipient. This legislation is specifically concerned with the issuance of recipient created tax invoices (RCTIs) for taxable supplies of renting, where the value of the supply is determined using a sales-based calculation process. The recipient must meet several criteria to be eligible to issue such an invoice, including being registered for Goods and Services Tax (GST) when the invoice is issued, having a written agreement with the supplier, and ensuring that both parties acknowledge their GST registration status and agree that the recipient will issue tax invoices for the supply while the supplier will not. Additionally, the recipient must comply with several procedural requirements, such as issuing the original or a copy of the tax invoice to the supplier within 28 days and retaining a copy. For entities with a GST turnover of less than $1 million, notification to the Commissioner of the intention to use RCTIs must be made within 14 days of the first such invoice issuance. The application of this determination is national in scope, extending across all states and territories of Australia, and is not revoked or varied by previous determinations made by the Commissioner.

Key Provisions

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 37) 2000 sets out the classes of tax invoices that may be issued by a recipient, specifically in the context of renting supplies (sections 3 and 6). It allows a recipient to issue a tax invoice for a taxable supply of renting if they establish the value of the supply using a sales-based calculation process and meet the requirements outlined in Clause 5. The recipient must be registered for GST, include the supplier’s ABN in the tax invoice, issue the invoice or a copy to the supplier within 28 days of valuing the supply, and comply with certain obligations under taxation laws. The recipient must also either have a written agreement with the supplier specifying the supplies or an agreement embedded in the tax invoice itself, confirming the recipient’s authority to issue the invoice and the supplier’s agreement not to issue one. Furthermore, if the recipient’s current GST turnover is less than $1,000,000, they must notify the Commissioner before issuing the first recipient created tax invoice. This legislation imposes several obligations on the parties involved. Firstly, the recipient must ensure they are registered for GST at the time of issuing the invoice. They must also include the supplier’s ABN in the tax invoice, issue the original or a copy of the invoice to the supplier within 28 days of determining the supply's value, and retain this copy. Additionally, the recipient must issue an adjustment note within 28 days of any adjustment and retain a copy of it. If the recipient's GST turnover is less than $1,000,000, they must notify the Commissioner of their intention to use recipient created tax invoices within 14 days of issuing the first such invoice. Furthermore, the recipient must have a written agreement with the supplier or an agreement embedded in the tax invoice, which must specify that the recipient can issue tax invoices, the supplier will not, and both parties acknowledge their GST registration and promise to notify each other if their registration status changes. Failure to comply with the provisions of this determination can result in various consequences. Issuing a document that would otherwise be a recipient created tax invoice when either party has failed to comply with any of the requirements is prohibited. If a recipient issues a tax invoice without meeting the necessary conditions, this could be considered a breach. However, the specific penalties for such breaches are not detailed in the provided text. It is important to note that any breach of the taxation laws or GST obligations could lead to further civil or criminal penalties as outlined in other relevant legislation, such as the A New Tax System (Goods and Services Tax) Act 1999.

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