A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 7) 2001

Administered by Department of the Treasury

Legislation au F2006B11607 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. 7) 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. 7) 2001.

Commencement (see Note 1)

2.                  (a) This determination commences on 1st January 2001.

(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 the right to use copyrighted material may be issued by a recipient of that supply where the recipient:

(i)                 establishes the value of that supply as a royalty based on the value of that use;

(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.

Definitions

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

copyrighted material means a play, a sound recording, a video recording, computer software, photographs (or similar item), a trademark or written work in which copyright can be held;

sign means the following or any combination of the following: any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent;

trademark means a sign used, or intended to be used, to distinguish goods and services supplied by one entity, from goods and services supplied by any other entity;

use also includes the copying, broadcasting or publicly performing the copyrighted material.

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. 7) 2001

Note 1

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 7) 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) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 5) 2001

see F2006B11607

1 January 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 1

Clause 5

am. (F2009L01772)

am. (F2009L01772)

 

Overview

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 7) 2001, as amended, was introduced to address the issue of recipients being able to issue tax invoices for taxable supplies of the right to use copyrighted material. This legislative instrument was enacted by the Australian Taxation Office under the authority granted by the A New Tax System (Goods and Services Tax) Act 1999 and the Acts Interpretation Act 1901. The primary objective of this determination is to outline the circumstances under which a recipient of a taxable supply can issue a tax invoice, specifically for supplies involving the right to use copyrighted material, and to establish the requisite conditions that must be satisfied by such recipients to ensure compliance with the taxation laws. This determination ensures that the tax system remains efficient and fair, by clearly defining the roles and responsibilities of both suppliers and recipients in the invoicing process for certain types of supplies.

Scope and Application

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 7) 2001 applies to entities not previously determined as able to issue a tax invoice belonging to specific classes of tax invoices that may be issued by a recipient. This determination particularly pertains to entities that can issue a tax invoice for the right to use copyrighted material, under certain conditions. The Act applies to entities that establish the value of such supplies as a royalty based on the value of the use and must meet specific requirements, including being registered for Goods and Services Tax (GST), issuing the invoice within 28 days of determining the supply value, and maintaining compliance with their GST obligations. The Act's jurisdictional reach is within Australia, governed by the Commonwealth under the A New Tax System (Goods and Services Tax) Act 1999. The application of this determination can be extended or restricted through subordinate instruments, such as the Recipient Created Tax Invoice – Embedded Agreement Amending Legislative Instrument 2009, which amends certain clauses to update the requirements for issuing 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. 7) 2001, as amended, is an essential legislative instrument for entities dealing with the right to use copyrighted material. This determination (section 3) applies to entities that have not been previously determined as capable of issuing a tax invoice for a taxable supply. Specifically, a recipient can issue a tax invoice for a supply involving the right to use copyrighted material if they establish the value of that supply as a royalty based on the value of that use (section 4). To do so, the recipient must meet several requirements. First, the recipient must be registered for GST at the time of issuing the invoice (section 5(a)). Second, the invoice must include the ABN of the supplier (section 5(b)). Third, the recipient must provide 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 and retain the original or a copy (section 5(c)). Fourth, if there is any adjustment to the invoice, the recipient must issue an adjustment note to the supplier within 28 days of the adjustment and retain the original or a copy (section 5(d)). Fifth, the recipient must comply with their obligations under the taxation laws (section 5(e)). Additionally, the recipient must have either a written agreement with the supplier (section 5(f)) or an agreement embedded in the recipient created tax invoice (section 5(g)) that specifies the supplies, acknowledges the registration for GST, and states that the supplier will not issue tax invoices for the supplies in question. Breaching the provisions outlined in this determination can lead to significant consequences. Firstly, any entity that issues a document that would otherwise be a recipient created tax invoice after failing to comply with the requirements of this determination is subject to penalties (section 5(g)). Such penalties could include fines and other administrative actions as stipulated by the A New Tax System (Goods and Services Tax) Act 1999. The exact penalties depend on the severity and nature of the breach, but they are designed to ensure compliance with the legislative requirements. Failure to adhere to these obligations can thus result in both civil and criminal consequences, highlighting the importance of strict compliance with the Act.

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