A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice (RCTI) in relation to an agent or broker in respect of general insurance business Determination (No. 44) 2000

A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice (RCTI) in relation to an agent or broker in respect of general insurance business Determination (No 44) 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)

This determination may be cited as: A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice (RCTI) in relation to an agent or broker in respect of general insurance business Determination (No 44) 2000.

Commencement (see Note 1)

2. (a) This determination commences on 1 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.

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, 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; 

(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:

Agent means an entity that has an agency agreement in respect of the supply of general insurance with the supplier of the supply.

Broker means an entity that has an agency agreement in respect of the supply of general insurance with the recipient of the supply.

Defined commission and/or fee based service means agency or broking services supplied by an agent or broker to an insurer in relation to the supply of general insurance by the insurer.

Establishes the value of the taxable supply means that the entity making the supply does not provide information to the recipient to establish the value of the supply.  The supplier must be unaware of the value of the supply and it must be commercially impractical for the supplier to determine the value of the taxable supply. The circumstances must be such that information to determine the value of the supply is only available to the recipient and not the supplier.

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 (RCTI) in relation to an agent or broker in respect of general insurance business Determination (No 44) 2000

Note 1

The A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice (RCTI) in relation to an agent or broker in respect of general insurance business Determination (No 44) 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

Table of Amendments