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Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination 2017 for Defined Commission and/or Fee Based Services in the Financial Industry

Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination 2017 for Defined Commission and/or Fee Based Services in the Financial Industry

Administered by Department of the Treasury

Legislation au F2017L00419 Not in force Legislative Instrument

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Explanatory Statement

General outline of determination

The determination is made under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
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.
The determination allows a recipient of a taxable supply of a defined commission and/or fee based service to issue recipient created tax invoices (RCTIs) in certain circumstances.
The determination is a legislative instrument for the purposes of the Legislation Act 2003.

Date of effect

5. This determination will commence retrospectively on 1 April 2017. This is to allow for reasonable and appropriate consultation to be completed.

6. Subsection 12(2) of the Legislation Act 2003 allows a retrospective application date for a Legislative Instrument. This determination aims to reduce compliance costs. A commencement date after 1 April 2017 would create unexpected compliance obligations for the intervening period. To provide certainty to taxpayers who have relied upon the previous determination and continue to rely on this determination and protect the rights of all affected taxpayers the retrospective application date is reasonable and appropriate. The retrospective application date will not adversely affect the rights of any person and will not impose a liability on any person for any act or omission before this instrument’s registration date.

What is the determination about?

7. Generally, under the GST Act, tax invoices are issued by the entity that makes the taxable supply.

8. The purpose of the determination is to outline a class of tax invoices (called RCTIs) that the Commissioner has determined may be issued by GST registered recipients of taxable supplies. The Commissioner makes the determination by taking into account a number of factors including the type of industry, the taxable supply, GST turnover of the recipient and certain requirements for issuing RCTIs. The factors reflect a balance between facilitating the practical use of RCTIs by businesses and maintaining the integrity of the GST system.

9. In accordance with the determination, a recipient of a taxable supply of a defined commission and/or fee based service supplied by:

(a) a financial supply facilitator or an agent of a financial supply facilitator; and/or

(b) an entity providing management, administrative, trustee, custodial or similar services where the recipient is a financial supply provider

may issue an RCTI for the taxable supply if they:

(i) establish the value of the taxable supply; and

(ii) satisfy the requirements set out in paragraph 6 of the determination

What is the effect of the determination

10. The effect of the determination is to streamline payment and invoicing processes by allowing the recipient of a taxable supply, that has the information to establish the value of the taxable supply, to issue the tax invoice.

11. The determination is substantially the same as the previous instrument that it replaces. An entity that satisfied the requirements of the previous determination will satisfy the requirements of this determination.

12. Compliance cost impact: Minor - there will be no or minimal impacts for both implementation and ongoing compliance costs. The determination is minor or machinery in nature.

Background

13. The determination replaces A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 49) 2000 – F2007B00006 – registered on 3 January 2007. The previous determination is repealed 1 April 2017.

Consultation

14. Subsection 17(1) of the Legislation Act 2003 requires, before the making of a determination, that the rule-maker is satisfied that appropriate and reasonably practicable consultation has been undertaken.

15. Broad consultation has been undertaken. The draft determination and draft explanatory statement were published on the ATO Legal database at ato.gov.au seeking feedback and comments for a period of two weeks. Notice of the draft determination was also published to ato.gov.au and subscription alerts issued. Tax professionals and tax associations regularly review both the Legal database and ato.gov.au and further promulgate advice of new drafts issued in their internal news bulletins. The major legal publishers also publish news of the drafts in their key tax alerting services - such as the Weekly Tax Bulletin (published by Thomson Reuters Australia) and Tax Tracker and Tax Week (published by CCH Australia). Additionally, draft determinations and draft explanatory statements have been published on the ATO Consultation Hub. Links to these drafts were published in newsletters such as the Taxation News (Chartered Accountants Australia and New Zealand) weekly bulletin. No comments have been received to date.

Legislative references:

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

Acts Interpretation Act 1901

Legislation Act 2003

Human Rights (Parliamentary Scrutiny) Act 2011

Statement of Compatibility with Human Rights

This statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Goods and Services Tax: Recipient Created Tax Invoice Determination 2017 for defined commission and/or fee based services in the financial industry

The 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

Generally, tax invoices are issued by a supplier under the basic rules for GST. This determination allows a recipient of a taxable supply of a defined commission and/or fee based service, to issue the tax invoice (called a recipient created tax invoice) subject to a number of provisos.

Human rights implications

The legislative instrument does not engage any of the applicable rights or freedoms. It allows for the streamlining of invoicing and payment practices.

Conclusion

The legislative instrument is compatible with human rights as it does not raise any human rights issues.

Overview

The Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination 2017 (the Determination) was enacted to provide clarity and streamline the invoicing process for certain services within the financial industry. It was introduced to address the gap in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) by allowing recipients of defined commission and/or fee-based services to issue recipient created tax invoices (RCTIs) under specific conditions. This Determination was made under the authority of subsection 29-70(3) of the GST Act and is consistent with the provisions of the Acts Interpretation Act 1901 and the Legislation Act 2003. The policy objective of this Determination is to reduce compliance costs and facilitate more efficient invoicing practices while ensuring the integrity of the GST system is maintained. The Determination came into effect retrospectively on 1 April 2017, allowing for appropriate consultation and providing certainty for taxpayers relying on the previous determination.

Scope and Application

The Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination 2017, made under the A New Tax System (Goods and Services Tax) Act 1999, applies to certain entities within the financial industry who are recipients of defined commission and/or fee-based services. Specifically, it allows recipients of such services supplied by a financial supply facilitator, an agent of such a facilitator, or an entity providing management, administrative, trustee, custodial, or similar services where the recipient is a financial supply provider, to issue a recipient created tax invoice (RCTI). This applies to entities that can establish the value of the taxable supply and meet the outlined requirements for issuing an RCTI. The determination streamlines payment and invoicing processes by enabling the recipient to issue the tax invoice, provided they meet the criteria. It has a retrospective application date of 1 April 2017, which allows for appropriate consultation and provides certainty to taxpayers. The instrument is intended to reduce compliance costs and is minor or machinery in nature, with minimal impact on implementation and ongoing compliance. It replaces the previous Classes of Recipient Created Tax Invoice Determination (No. 49) 2000 and is compatible with human rights, as it does not engage any applicable rights or freedoms.

Key Provisions

The Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination 2017 for Defined Commission and/or Fee Based Services in the Financial Industry (the "Determination") is a legislative instrument made under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). This Determination allows a recipient of a taxable supply of a defined commission and/or fee based service to issue a recipient created tax invoice (RCTI) under certain conditions (section 9). The Determination applies to taxable supplies provided by financial supply facilitators, agents of financial supply facilitators, and entities providing management, administrative, trustee, custodial or similar services where the recipient is a financial supply provider. To issue an RCTI, the recipient must establish the value of the taxable supply and satisfy the requirements set out in paragraph 6 of the Determination (section 9). The Determination streamlines payment and invoicing processes by allowing the recipient to issue the tax invoice if they have the necessary information (section 10). The Determination is substantially the same as the previous instrument that it replaces, and entities that satisfied the requirements of the previous Determination will satisfy the requirements of this Determination (section 11). The Determination imposes minor or machinery in nature compliance costs (section 12). It replaces the previous Determination registered on 3 January 2007 and repeals the previous Determination on 1 April 2017 (section 13). The Determination is compatible with human rights as it does not raise any human rights issues (section 16). The Determination imposes obligations on entities that issue RCTIs under its provisions. These obligations include establishing the value of the taxable supply and satisfying the requirements set out in paragraph 6 of the Determination (section 9). The Determination aims to balance facilitating the practical use of RCTIs by businesses and maintaining the integrity of the GST system (section 8). The Determination also requires entities to comply with the requirements of the GST Act and any other relevant legislation (section 15). The Determination provides certainty to taxpayers who have relied upon the previous Determination and continue to rely on this Determination and protects the rights of all affected taxpayers (section 6). The Determination imposes no civil or criminal consequences for breach, but failure to comply with the requirements of the Determination may result in the RCTI not being valid for GST purposes (section 15). The Determination does not provide for specific offences, penalties, or civil/criminal consequences for breach. However, failure to comply with the requirements of the Determination may result in the RCTI not being valid for GST purposes. This may result in the recipient being unable to claim a GST credit for the supply and the supplier being unable to claim a GST output tax credit for the supply. In addition, the Determination requires entities to comply with the requirements of the GST Act and any other relevant legislation. Failure to comply with these requirements may result in civil or criminal penalties under the relevant legislation. The maximum penalties for GST-related offences vary depending on the offence and may include fines and/or imprisonment.

Area of Law: Taxation Law
Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Compliance Obligations; Reporting & Disclosure Obligations

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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.

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