A New Tax System (Goods and Services Tax) (Waiver of Tax Invoice Requirement – Direct Entry Services) Determination 2025

Administered by Department of the Treasury

Legislation au F2025L00930 In force Legislative Instrument

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Explanatory Statement

A New Tax System (Goods and Services Tax) (Waiver of Tax Invoice Requirement – Direct Entry Services) Determination 2025

General outline of instrument

  1.                   This instrument is made under subsection 29-10(3) of the A New Tax System (Goods and Services Tax) Act 1999 (the Act).
  2.                   This instrument waives the requirement for a recipient of a supply of a Direct Entry Service, in certain circumstances, to hold a tax invoice before the relevant input tax credit will be attributable to a tax period.
  3.                   The instrument is a legislative instrument for the purposes of the Legislation Act 2003.
  4.                   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 or 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

  1.                   This instrument commences on the day after it is registered on the Federal Register of Legislation.

 

Background

  1.                   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.
  2.                   In some cases, the requirement for the recipient to hold a tax invoice that meets the requirements in subsection 29-70(1) of the Act may impose a disproportionate burden on a supplier or recipient, particularly if they hold another document that has most of the required features of a tax invoice.
  3.                   The Direct Entry System (also known as the Bulk Electronic Clearing System) allows for high volume electronic debit and credit payments. It is used by businesses and government entities to make regular automated payments to and from bank accounts including direct debit and direct credit transactions.
  4.                   Direct entry is used for such payments as internet banking transactions and direct debit and direct credit instructions. It is generally used for smaller day-to-day payments, but is available for payments up to $100 million. Payments collected from customers’ bank accounts are ‘direct debits’ and payments sent to customers’ bank accounts are ‘direct credits’.
  5.               Direct entry services are defined in the instrument to mean the processing of an entity’s direct credit and direct debit payments by an Australian ADI (authorised deposit-taking institution). These services are a taxable supply and under the normal rules, a recipient is required to hold a tax invoice before attributing any entitlement to an input tax credit. These payments may also be known in the industry as direct entry files.
  6.               Due to the high volume of transactions, it may present difficulties for entities if they are required to hold a tax invoice for each and every creditable acquisition of direct entry services.
  7.               Subsection 29-10(3) of the Act allows the Commissioner to determine, by legislative instrument, circumstances in which the requirement to hold a tax invoice does not apply.
  8.               This instrument repeals and replaces A New Tax System (Goods and Services Tax) Act 1999 Waiver of Tax Invoice Requirement Determination (No.30) 2015 which would otherwise sunset on 1 October 2025. The instrument has the same substantive effect as the one it is replacing.

 

Effect of this instrument

  1.               This instrument waives the requirement for a recipient of a supply of a direct entry service, in certain circumstances, to hold a tax invoice in order to attribute the relevant input tax credit to a tax period where the requirements in section 6 are satisfied.
  2.               Under paragraph 6(a) the recipient must make a creditable acquisition of a direct entry service from an Australian ADI which can include direct credit payments (such as salary and welfare payments), direct debit payments (such as utility bills), and consumer ‘pay anyone’ bank transfers.
  3.               Paragraph 6(b) requires that the recipient hold a document at the time that they give the GST return to the Commissioner from the Australian ADI that meets the information requirements listed in section 7. These information requirements ensure the integrity of the GST system and require sufficient information to allow a number of key matters to be determined, including the nature of the transaction and the identity of the recipient and the supplier.
  4.               Under section 7 the document must include the following information:
  • the recipient’s name
  • the recipient’s ABN or address, and
  • for each acquisition of Direct Entry Services for which the recipient may claim an input tax credit:

−                    the date recipient made the acquisition

−                    the supplier’s name (the standard three letter code used within the Australian ADI industry to identify Australian ADIs is acceptable)

−                    the supplying Australian ADI’s ABN or GST branch Registration Number

−                    the description of the acquisition, for example, ‘DE Fee’

−                    (the amount of consideration payable by the recipient for the acquisition, and

−                    the amount of GST payable in relation to the consideration payable.

 

Compliance cost assessment

  1.               Compliance cost impact: minor – there will be no additional regulatory impacts as the instrument is minor and machinery in nature (OIA25-09518).

 

Consultation

  1.               Subsection 17(1) of the Legislation Act 2003 requires the Commissioner to be satisfied that appropriate and reasonably practicable consultation has been undertaken before they make an instrument.
  2.               Public consultation on the draft instrument and explanatory statement was undertaken for a period of 4 weeks commencing 28 May 2025.
  3.               The draft instrument and draft explanatory statement were published on the ATO Legal database and publicised on the database’s ‘What's new’ page. Major tax and superannuation publishers and associations commonly monitor these pages and usually include the details in the daily and weekly alerts and newsletters to their subscribers and members.
  4.               No feedback was received on the draft instrument and explanatory statement during the consultation period.


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 – Direct Entry Services) Determination 2025

This legislative instrument 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

This legislative instrument waives the tax invoice requirement for entities who make creditable acquisitions of Direct Entry Services, in certain circumstances.

 

Human rights implications

This legislative instrument does not engage any of the applicable rights or freedoms, as it merely waives the requirement for a recipient of a supply of Direct Entry Services to hold a tax invoice in certain circumstances.

 

Conclusion

This legislative instrument 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 – Direct Entry Services) Determination 2025 was enacted by the Commissioner of Taxation under subsection 29-10(3) of the A New Tax System (Goods and Services Tax) Act 1999. This instrument addresses the disproportionate burden imposed on suppliers and recipients of direct entry services, particularly when they hold another document that contains most of the required features of a tax invoice, by waiving the requirement for a recipient to hold a tax invoice before attributing an input tax credit to a tax period. This waiver applies to creditable acquisitions of direct entry services, such as direct credit and direct debit payments, provided that the recipient holds a document meeting the specified information requirements at the time they submit their GST return to the Commissioner. The instrument is compatible with human rights as it does not engage any of the applicable rights or freedoms. The objective of this instrument is to streamline the tax process for entities dealing with high-volume direct entry services, thereby reducing administrative burdens while maintaining the integrity of the GST system. Public consultation on the draft instrument was undertaken for a period of four weeks, with no feedback received. This determination repeals and replaces the previous waiver determination, ensuring continuity in its substantive effect.

Scope and Application

The A New Tax System (Goods and Services Tax) (Waiver of Tax Invoice Requirement – Direct Entry Services) Determination 2025 is a legislative instrument made under the A New Tax System (Goods and Services Tax) Act 1999. This instrument applies to entities that make creditable acquisitions of Direct Entry Services from an Australian Authorised Deposit-taking Institution (ADI). Direct Entry Services involve the processing of direct credit and direct debit payments, which can include transactions such as salary and utility payments, as well as consumer transfers. The determination waives the requirement for a recipient to hold a tax invoice before attributing an input tax credit to a tax period in certain circumstances, recognising that the high volume of transactions may impose a disproportionate burden on entities if they were required to hold a tax invoice for each transaction. The instrument applies to entities making such acquisitions and holding an alternative document that meets the specified information requirements, including details such as the recipient's name, ABN or address, the supplier's name and ABN, and details of the transaction itself. The instrument operates within the Commonwealth jurisdiction and replaces an earlier instrument that was set to expire on 1 October 2025. It does not create any additional compliance costs as it is minor and machinery in nature, and there are no exclusions or exemptions specified beyond the conditions outlined in the instrument itself.

Key Provisions

The A New Tax System (Goods and Services Tax) (Waiver of Tax Invoice Requirement – Direct Entry Services) Determination 2025 (the Determination) is a legislative instrument made under the A New Tax System (Goods and Services Tax) Act 1999 (the Act) (s 29-10(3)). The Determination waives the requirement for a recipient of a supply of a direct entry service to hold a tax invoice in certain circumstances, in order to attribute the relevant input tax credit to a tax period (s 6). This waiver applies to creditable acquisitions made from an Australian ADI, including direct credit and direct debit payments, as well as consumer ‘pay anyone’ bank transfers (s 6(a)). To avail of this waiver, the recipient must hold a document from the Australian ADI at the time they give their GST return to the Commissioner that includes specific information such as the recipient’s name and ABN, the date of acquisition, the supplier’s name and ABN, the description of the acquisition, and the amount of consideration and GST payable (s 7). The Determination imposes obligations on the parties involved, primarily the recipients of direct entry services. To benefit from the waiver, recipients must ensure that they hold a document that contains all the required information specified in section 7 of the Determination (s 6(b)). This document must be held at the time they submit their GST return to the Commissioner. Failure to comply with these requirements means that the recipient will not be able to attribute the input tax credit to their tax period and may face difficulties in claiming the credit. The Determination does not specify any specific offences or penalties for non-compliance with its provisions. However, non-compliance with the Act’s general requirements for tax invoices and input tax credits can result in civil or criminal penalties. For instance, providing a false or misleading document with the intent to obtain a tax benefit can result in a civil penalty of up to 50 penalty units (currently AUD 11,000) per false or misleading document under section 28-10 of the Act, or criminal penalties involving fines and imprisonment under section 28-15 of the Act. The Determination’s primary focus is on streamlining the compliance process for high-volume transactions, thus indirectly supporting compliance by reducing the administrative burden of maintaining detailed tax invoices for each transaction.

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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.