A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 4) 2001

Administered by Department of the Treasury

Legislation au F2005B02814 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. 4) 2001

 

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. 4) 2001.

Commencement (see Note 1)

2. This determination commences on 29 August 2001.

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.

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

4.                  A tax invoice that belongs to a class of tax invoices for a taxable supply of a defined commission and/or fee based service may be issued by a recipient that is an administrator of a superannuation scheme, where the recipient:

(a)               establishes the value of the taxable supply; and

(b)               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 tax 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.

Definitions

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

administrator means an entity who directs or manages the affairs of a superannuation scheme

defined commission and/or fee based service means a service supplied by an entity for which a commission or fee is payable and includes, but is not restricted to services such as:

  • preparation, reconciliation and submission of contribution data and exception reports;
  • preparation, processing and submission of member leaving service advice; or
  • preparation, processing and submission of new member application records;

superannuation scheme means a regulated superannuation fund, an approved deposit fund, a pooled superannuation trust or a public sector superannuation scheme within the meaning of the Superannuation Industry (Supervision) Act 1993.

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. 4) 2001

Note 1

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 4) 2001 (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. 4) 2001

see F2005B02814

29 August 2001

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. (F2009L01772)

 

Overview

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 4) 2001 was enacted to address the issue of recipient created tax invoices (RCTIs) for specific services, particularly those related to superannuation schemes. This legislative instrument, made under the authority of the A New Tax System (Goods and Services Tax) Act 1999 and the Acts Interpretation Act 1901, was prepared by the Goods and Services Tax Centre of Expertise within the Australian Taxation Office. The determination specifies the conditions under which a recipient, in this case an administrator of a superannuation scheme, may issue a tax invoice for commission and/or fee-based services. The primary objective is to ensure compliance with GST regulations while allowing flexibility for certain entities to issue tax invoices on behalf of suppliers, provided they meet specific criteria such as being registered for GST, setting out the supplier’s ABN, and satisfying other outlined requirements. This determination aims to streamline the tax invoicing process for these services, ensuring clarity and compliance within the superannuation industry.

Scope and Application

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 4) 2001 applies to entities, specifically administrators of superannuation schemes, that are not previously determined as being able to issue a tax invoice belonging to a class of tax invoices for a taxable supply of defined commission and/or fee-based services. This determination applies on a Commonwealth level and came into effect on 29 August 2001. The recipients must be registered for GST, set out the supplier’s ABN, issue the tax invoice within 28 days of determining the value of the supply, issue an adjustment note within 28 days of any adjustment, comply with their taxation obligations, and have either a written agreement with the supplier or an embedded agreement within the tax invoice. The determination also specifies the definition of key terms used within the context of the legislation. Any amendments to the determination are noted in the tables of instruments and amendments, with the most recent amendment coming into effect on 1 July 2009.

Key Provisions

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 4) 2001 outlines specific circumstances under which a recipient of a taxable supply can issue a tax invoice (sections 3 and 4). This determination allows a recipient who is an administrator of a superannuation scheme to issue a tax invoice for a defined commission and/or fee-based service. The recipient must establish the value of the taxable supply and meet the requirements specified in Clause 5. This provision is particularly relevant for entities managing superannuation schemes and facilitating services for which commissions or fees are payable, such as the preparation and submission of contribution data, member leaving service advice, and new member application records. The Act imposes several obligations and requirements on the parties involved. The recipient must be registered for GST at the time of issuing the tax invoice (Clause 5(a)). Additionally, the tax invoice must include the supplier’s ABN (Clause 5(b)). The recipient is required to provide the original or a copy of the tax invoice to the supplier within 28 days of determining the value of the taxable supply and retain a copy for their records (Clause 5(c)). Similarly, any adjustment notes must be issued and retained under the same timeframe (Clause 5(d)). The recipient must comply with their obligations under the taxation laws (Clause 5(e)). Furthermore, the recipient must have either a written agreement with the supplier or an embedded agreement in the tax invoice, specifying that the recipient can issue the tax invoice and the supplier will not issue one (Clause 5(f)). The agreement must acknowledge each party's GST registration status and their commitment to notify the other party of any changes in registration (Clause 5(f)(iv)). Failure to comply with the requirements set out in this determination can lead to significant consequences. The Act does not explicitly state penalties within the determination itself but generally, under the A New Tax System (Goods and Services Tax) Act 1999, penalties for non-compliance can include fines and, in severe cases, imprisonment. The specific penalties can vary depending on the nature and extent of the non-compliance. For instance, providing a false or misleading document, such as a tax invoice, can result in penalties up to $22,200 for individuals and $111,000 for corporations. Additionally, the Act may impose civil penalties for incorrect GST reporting or failure to issue a tax invoice where required. It is essential for recipients and suppliers to adhere strictly to the requirements to avoid these potential penalties.

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