A New Tax System (Goods and Services Tax): Waiver of Tax Invoice Requirement (Acquisitions from or by a Beneficiary of a Bare Trust) Determination 2023

Administered by Department of the Treasury

Legislation au F2023L00329 In force Legislative Instrument

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Explanatory Statement

A New Tax System (Goods and Services Tax): Waiver of Tax Invoice Requirement (Acquisitions from or by a Beneficiary of a Bare Trust) Determination 2023

 

General outline of determination

  1. This determination is made under subsection 29-10(3) of the A New Tax System (Goods and Services Tax) Act 1999 (the Act).
  2. This determination waives the requirement for a recipient or a beneficiary of a bare trust to hold a tax invoice when they hold a document that meets the requirements prescribed in this instrument.
  3. This determination replaces A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement (Acquisitions from or Acquisitions by a Beneficiary of a Bare Trust) Legislative Instrument 2013.
  4. This determination is a legislative instrument under the Legislation Act 2003.
  5. Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations and by-laws) the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

 

Date of effect

6.                  This determination commences on the day after it is registered on the Federal Register of Legislation.

 

Effect of this determination

7.                  This determination applies to a recipient that makes a creditable acquisition from a beneficiary through the trustee of a bare trust, or a beneficiary that makes a creditable acquisition from a third party through the trustee of a bare trust.

8.                  This determination waives the requirement for a recipient or a beneficiary of a bare trust to hold a tax invoice in order to attribute an input tax credit to a tax period when the recipient, beneficiary or their agent (including the trustee) holds a document that meets the information requirements specified in this instrument.

 

Supplies by a beneficiary of a bare trust

9.                  In some circumstances a beneficiary, rather than the trustee of a bare trust, may make taxable supplies or creditable acquisitions. If the trustee issues or holds tax invoices it does so on behalf of the beneficiary in those circumstances. Goods and Services Tax Ruling GSTR 2008/3 Goods and services tax: dealings in real property by bare trusts explains the ATO view on the GST treatment of supplies of real property involving beneficiaries of bare trusts or similar trusts.

10.              Where a beneficiary of a bare trust makes a taxable supply, subparagraph 29‑70(1)(c)(i) of the Act requires that the tax invoice issued by the beneficiary contains enough information to enable the beneficiary's identity and Australian business number (ABN) to be clearly ascertained from the document. A trustee of a bare trust will often issue documents intended to be tax invoices on behalf of the beneficiary.

11.              A document issued by the trustee, for the supply made by the beneficiary, that contains the identity and ABN of the bare trust or the trustee of the bare trust as a supplier (rather than the beneficiary's details) will not satisfy the information requirements for a tax invoice.

12.              The waiver applies where the recipient instead holds a document containing the identity and ABN of the bare trust or the trustee of the bare trust, and that meets the requirements in paragraphs 29-70(1)(a) and 29-70(1)(c) of the Act, other than subparagraph 29-70(1)(c)(i).

 

Acquisitions by a beneficiary of a bare trust

13.              Under subparagraph 29-70(1)(c)(ii) of the Act, if a beneficiary of the bare trust makes a creditable acquisition where the total price of the thing or things acquired is at least $1,000 (or a higher amount specified by the regulations), the document held by the beneficiary needs to contain enough information to enable the beneficiary's identity or ABN to be clearly ascertained.

14.              Where the beneficiary makes the acquisition and a document issued by a supplier contains only the identity or ABN of the bare trust or the trustee of the bare trust, the document will not satisfy the information requirements for a tax invoice under subsection 29-70(1) of the Act.

15.              The waiver applies where the beneficiary makes an acquisition but the beneficiary or the trustee of the bare trust instead holds a document containing the identity or ABN of the bare trust or of the trustee as the recipient, and the document meets the requirements in paragraphs 29‑70(1)(a) and 29-70(1)(c) of the Act, other than subparagraph 29-70(1)(c)(ii).

 

Compliance cost assessment

16.              Compliance cost impact: Minor – There will be no additional impacts as the instruments are minor and machinery in nature OBPR22-03758.

 

Background

17.              Generally, when a recipient makes a creditable acquisition, an input tax credit for the acquisition is not attributable to a tax period until they hold a tax invoice. A tax invoice is a document that meets the requirements in subsection 29‑70(1) of the Act.

18.              In some cases, the necessity for the recipient to hold a document that meets the requirements in subsection 29-70(1) of the Act may impose a disproportionate burden on a supplier or a recipient, particularly if the document that they do hold has most of the required features of a tax invoice.

19.              The Commissioner has a discretion under subsection 29-70(1B) of the Act to treat a document as a tax invoice where not all the requirements in subsection 29-70(1) of the Act are met. However, the discretion under subsection 29-70(1B) of the Act is administrative and can only be exercised on a case-by-case basis.

20.              As such, the Commissioner makes this determination under subsection 29‑10(3) of the Act to ensure that taxpayers do not have to change their administrative practices formed in reliance on past legislative instruments and rulings that are now either withdrawn or repealed.

 

Consultation

21.              Subsection 17(1) of the Legislation Act 2003 requires that the Commissioner be satisfied that appropriate and reasonably practicable consultation has been undertaken before he makes a determination.

22.              Public consultation was undertaken on this instrument for a period of 3 weeks from 25 November 2022 to 16 December 2022 inclusive.

23.              The draft instrument and draft explanatory statement were published on the ATO Legal database, which is publicly available. Publication was advertised via the 'What's new' page on that website, and via the 'Open Consultation' page on ato.gov.au. Major tax and superannuation publishers and associations monitor these pages and include the details in the daily and weekly alerts and newsletters that they provide to their subscribers and members.

24.              No comments were received as part of the consultation process.

 

 

 

Legislative references

A New Tax System (Goods and Services) Tax Act 1999

A New Tax System (Goods and Services Tax) Regulations 2019

Acts Interpretation Act 1901

Human Rights (Parliamentary Scrutiny) Act 2011

Legislation Act 2003

 

Related Rulings / Determinations

GSTR 2008/3 Goods and services tax: dealings in real property by bare trusts


Statement of compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

A New Tax System (Goods and Services Tax): Waiver of Tax Invoice Requirement (Acquisitions from or by a Beneficiary of a Bare Trust) Determination 2023

This determination is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the legislative instrument

A taxpayer must generally hold a tax invoice to be able to claim an input tax credit under the A New Tax System (Goods and Services Tax) Act 1999 (the Act). A tax invoice is a document that meets certain requirements under the Act. This instrument waives the requirement under the Act to hold a tax invoice before an input tax credit can be claimed in a tax period. This waiver will only apply if the conditions set out in the instrument are met. The purpose of this waiver is to reduce the compliance burden for recipients and suppliers.

 

Human rights implications

This legislative instrument does not engage any of the applicable rights or freedoms because it merely waives the requirement to hold a tax invoice in certain circumstances, and replaces it with a requirement to hold a different document or documents that meet alternative conditions.

 

Conclusion

This determination is compatible with human rights as it does not raise any human rights issues.

Overview

The A New Tax System (Goods and Services Tax): Waiver of Tax Invoice Requirement (Acquisitions from or by a Beneficiary of a Bare Trust) Determination 2023 was enacted to address the administrative burden faced by suppliers and recipients of goods and services in the context of acquisitions by or from beneficiaries of bare trusts under the A New Tax System (Goods and Services Tax) Act 1999. This determination was introduced to ensure that taxpayers do not have to alter their administrative practices formed based on previous legislative instruments and rulings, which have since been withdrawn or repealed. The determination waives the requirement for a recipient or beneficiary of a bare trust to hold a tax invoice if they instead hold a document that meets the prescribed conditions, thereby reducing compliance costs and maintaining continuity in business practices. This legislative instrument was made by the Commissioner of Taxation under the authority conferred by the Legislation Act 2003, and its policy objective is to alleviate the undue administrative burden on taxpayers.

Scope and Application

The A New Tax System (Goods and Services Tax): Waiver of Tax Invoice Requirement (Acquisitions from or by a Beneficiary of a Bare Trust) Determination 2023 applies to recipients and beneficiaries of a bare trust who make creditable acquisitions from or through the trustee of a bare trust, aiming to alleviate certain compliance burdens associated with obtaining tax invoices. This legislative instrument operates under the authority conferred by the A New Tax System (Goods and Services Tax) Act 1999 and the Legislation Act 2003, thus falling within the Commonwealth jurisdiction. The determination waives the tax invoice requirement when the recipient or beneficiary holds a document that meets the specified information criteria, which substitute for the usual tax invoice conditions under the Act. Notably, this waiver does not apply to documents that solely contain the identity or Australian Business Number (ABN) of the bare trust or its trustee instead of the beneficiary's details. The determination is designed to align with past legislative instruments and rulings, ensuring that taxpayers do not need to alter their administrative practices significantly. There were no public comments received during the consultation period, indicating a smooth transition or perhaps a well-communicated update to existing practices.

Key Provisions

The main operative sections of the "A New Tax System (Goods and Services Tax): Waiver of Tax Invoice Requirement (Acquisitions from or by a Beneficiary of a Bare Trust) Determination 2023" (the Determination) include sections 6, 7, and 8. Section 6 specifies that the Determination commences on the day after it is registered on the Federal Register of Legislation. Section 7 outlines that the Determination applies to recipients and beneficiaries of a bare trust who make creditable acquisitions from or through a trustee of a bare trust. Section 8 waives the requirement for a recipient or a beneficiary of a bare trust to hold a tax invoice to attribute an input tax credit to a tax period, provided the document held meets the information requirements specified in the instrument. The Determination imposes specific obligations on the parties it governs. Beneficiaries of a bare trust, or recipients making creditable acquisitions from such beneficiaries, must hold a document that meets the specified information requirements instead of a tax invoice to attribute an input tax credit. This document must include details that enable the beneficiary's identity and Australian Business Number (ABN) to be clearly ascertained, as outlined in paragraphs 29-70(1)(a) and 29-70(1)(c) of the A New Tax System (Goods and Services Tax) Act 1999 (the Act). The document should not contain the identity or ABN of the bare trust or the trustee as a supplier but should meet the requirements other than subparagraph 29-70(1)(c)(i) for supplies and subparagraph 29-70(1)(c)(ii) for acquisitions. Breach of the requirements under this Determination does not explicitly outline specific offences, penalties, or civil/criminal consequences. However, failing to comply with the Act’s requirements generally may lead to penalties. Under the Act, non-compliance can result in civil penalties, including fines. For example, under section 28-10 of the Act, a person who contravenes the Act can be fined up to the greater of $2,220 or three times the amount of GST avoided. In criminal cases, significant non-compliance can lead to prosecution, with potential penalties including substantial fines and imprisonment. The specific consequences would depend on the nature and extent of the breach, as governed by the general provisions of the Act.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.