A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 6) 2000

Administered by Department of the Treasury

Legislation au F2006B01574 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. 6) 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. 6) 2000.

Commencement (see Note 1)

2. (a) This determination commences on 13th July 2000.

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

4. A tax invoice that belongs to a class of tax invoices for a taxable supply of research may be issued by a Grantor that is the recipient of a taxable supply where the grantor:

(i) establishes the value of the grant before the supply is made using a qualitative, quantitative or other evaluative 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;

(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; and

(v)               the recipient indemnifies the supplier for any liability for GST and penalty that may arise from an understatement of the GST payable on any of the specified supplies received on a tax invoice the recipient issues; 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. The recipient indemnifies the supplier for any liability for GST and penalty that may arise from an understatement of the GST payable on any of the specified supplies received on a tax invoice the recipient issues. 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:

Grantor means a non-profit body providing a research grant to a grantee.

Grantee means the entity or research facility to which the Grantor gives a research grant.

Research Grant means consideration paid by the Grantor to the Grantee for a research project or initiative in which the Grantee is required to report on their findings or acknowledge the grant in some manner.

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. 6) 2000

Note 1

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 6) 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. 6) 2000

see F2006B01574

13 July 2000

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 5f

am. (F2009L01772)

 

Overview

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 6) 2000 was enacted to address the issue of determining the classes of tax invoices that may be issued by recipients of taxable supplies. This legislative instrument was made under the authority of 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. It commenced on 13 July 2000 and was prepared by the Goods and Services Tax Centre of Expertise, Australian Taxation Office, taking into account amendments up to the Recipient Created Tax Invoice – Embedded Agreement Amending Legislative Instrument 2009. The primary objective of this determination is to specify the circumstances under which a recipient may issue a tax invoice for a taxable supply of research, ensuring that certain requirements are met to validate the issuance of such tax invoices.

Scope and Application

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 6) 2000 applies to entities that are not previously determined as being able to issue a tax invoice belonging to a specific class of tax invoices. The determination outlines the conditions under which a tax invoice for a taxable supply of research may be issued by a Grantor, who is the recipient of a taxable supply. Specifically, the Grantor must establish the value of the grant before the supply is made and meet the requirements outlined in Clause 5 of the determination. The recipient of the taxable supply must be registered for GST when the invoice is issued, set out the supplier's ABN in the tax invoice, issue the invoice or a copy to the supplier within 28 days of making or determining the value of the supply, and reasonably comply with their obligations under the taxation laws. Additionally, the recipient must either have a written agreement with the supplier or an agreement embedded in the tax invoice, specifying the supplies to which it relates and agreeing that the recipient can issue tax invoices in respect of the supplies. This determination applies nationally in Australia and does not revoke or vary any previous determination made by the Commissioner or a delegate of the Commissioner. The application of the determination can be extended or restricted through subordinate instruments.

Key Provisions

The main operative sections of the A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 6) 2000 (the Determination) focus on defining the circumstances under which a tax invoice can be issued by the recipient of a taxable supply, specifically for research grants, as well as the requirements that must be met by the recipient to issue such an invoice. Section 4 of the Determination permits a non-profit body, referred to as the Grantor, who provides a research grant to another entity or research facility, known as the Grantee, to issue a tax invoice for the taxable supply of research, provided the Grantor establishes the value of the grant before the supply is made and satisfies certain conditions. These conditions include being registered for GST when the invoice is issued, setting out the supplier’s ABN in the tax invoice, issuing the invoice or a copy to the supplier within 28 days of making or determining the value of the supply, and complying with the taxation laws. The Determination imposes several obligations and requirements on the parties involved. Firstly, the recipient, who in this case is the Grantor, must be registered for GST when issuing the tax invoice. Secondly, the recipient must include the supplier’s ABN in the tax invoice and issue the original or a copy of the invoice to the supplier within 28 days of the supply or determining its value. Furthermore, the recipient must have a written agreement with the supplier that specifies the supplies to which it relates, which must be current and effective when the recipient created tax invoice (RCTI) is issued. This agreement must detail that the recipient can issue tax invoices for the supplies, the supplier will not issue tax invoices, and both parties acknowledge their GST registration and commit to notifying each other if their registration status changes. Additionally, the recipient must indemnify the supplier for any GST liability or penalties arising from an understatement of the GST payable on any of the specified supplies. If a written agreement is not feasible, the terms of the agreement can be embedded in the RCTI itself. The Determination also outlines the consequences for breaches. Any breach of the requirements set out in the Determination can result in civil and criminal penalties. Specifically, section 29-5 of the A New Tax System (Goods and Services Tax) Act 1999 provides for civil penalties for breaches of the Act, which can include fines of up to $22,200 for individuals and $111,000 for bodies corporate, depending on the nature and severity of the breach. Additionally, section 29-7 of the Act provides for criminal penalties, which can include imprisonment for up to five years for serious or repeated breaches. The Determination also stipulates that the recipient must not issue a document that would otherwise be a recipient created tax invoice if either party fails to comply with any of the requirements of the Determination. This underscores the importance of adhering to the outlined conditions to avoid potential legal ramifications.

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