Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No.18) 2015
Explanatory Statement
General Outline of Instrument
- This determination is made under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999.
- The determination allows an entity that is the recipient of a taxable supply of access to premises to issue Recipient Created Tax Invoices (RCTIs) to the provider if the recipient determines the value of the taxable supply.
- The determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Date of effect
4. The instrument commences on the day after registration.
5. The instrument does not apply retrospectively.
What is this instrument about:
6. The purpose of this instrument is to outline a class of tax invoices that the Commissioner has determined may be issued by recipients of taxable supplies. The Commissioner makes the determination by taking account of 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.
7. A tax invoice that belongs to a class of tax invoices for a taxable supply of access to premises may be issued by an entity that is the recipient of that taxable supply where:
- the recipient establishes the value of that access by a sales based calculation process; and
- the recipient satisfies the requirements set out in Clause 6 of the legislative instrument.
What is the effect of this instrument:
8. The effect of this instrument is to allow entity that is the recipient of access to premises to issue RCTIs to the provider. The value of the taxable supply, that is access to premises, is based on the sales the recipient makes to third parties. The recipients have the expertise, knowledge and access to the relevant information to accurately calculate the value of the taxable supply. This instrument allows them to streamline their current invoicing and payment practices.
9. Compliance cost impact: minor- there will be no or minimal impacts for both implementation and ongoing compliance costs. The legislative instrument is minor or machinery in nature.
Background:
10. This instrument replaces A New Tax System (Goods and Services Tax) 1999 Classes of Recipient Created Tax Invoice Determination (No. 24) 2000. The replaced instrument is repealed on the commencement of this determination.
Consultation:
11. Section 18 of the Legislative Instruments Act 2003 specifically provides for circumstances where consultation may not be necessary or appropriate. One of those circumstances is where the instrument is considered minor or machinery in nature, and does not substantially change the law.
12. Because there is no substantive change from the previous instrument therefore the instrument is considered minor or machinery in nature.
13. As such, no further consultation has been undertaken in the development of this instrument.
James O’Halloran
Deputy Commissioner of Taxation
15 September 2015
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: Classes of Recipient Created Tax Invoice Determination (No. 18) 2015
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 allows entities that are recipients to access premises to issue Recipient Created Tax Invoices (RCTIs) to the providers, if the recipient determines the value of the taxable supply, and the requirements of the legislative instrument are satisfied.
Human rights implications
This instrument does not engage any of the applicable rights or freedoms. It allows for the streamlining of current invoicing and payment practices.
Conclusion
This 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 (No. 18) 2015 was enacted to streamline the process by which certain entities can issue tax invoices for taxable supplies, specifically access to premises. This legislative instrument was introduced under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999, and it was made by the Commissioner of Taxation. The policy objective behind this determination is to balance the practical use of Recipient Created Tax Invoices (RCTIs) by businesses with the need to maintain the integrity of the GST system. This legislative instrument allows entities that are recipients of access to premises to issue RCTIs to the providers if the value of the supply is determined by the recipient through a sales-based calculation process, thereby facilitating more efficient invoicing and payment practices with minimal compliance costs.
Scope and Application
The Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 18) 2015 applies to entities that are recipients of taxable supplies of access to premises, allowing them to issue Recipient Created Tax Invoices (RCTIs) to the providers under certain conditions. This legislative instrument is designed to facilitate the practical use of RCTIs by businesses while maintaining the integrity of the GST system. The determination is applicable on a Commonwealth level and does not apply retrospectively, coming into effect on the day after registration. This instrument does not substantially change the law from its predecessor, the A New Tax System (Goods and Services Tax) 1999 Classes of Recipient Created Tax Invoice Determination (No. 24) 2000, which has been repealed. The application of this determination may be extended or restricted through subordinate instruments. Notably, there are no stated exclusions, exemptions, or thresholds, but the recipients must determine the value of the taxable supply through a sales-based calculation process and meet the specified requirements in Clause 6 of the instrument. The instrument is deemed minor or machinery in nature, resulting in minimal compliance costs for both implementation and ongoing adherence.
Key Provisions
The Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 18) 2015, made under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999, specifies conditions under which recipients of taxable supplies of access to premises can issue Recipient Created Tax Invoices (RCTIs) to the suppliers. The main provision, contained in Clause 6, allows a recipient to issue an RCTI if they determine the value of the taxable supply using a sales-based calculation process and meet the criteria outlined in the determination. This provision enables recipients to streamline their invoicing processes by allowing them to issue tax invoices based on their own calculations of the taxable supply value, provided they adhere to the stipulated requirements.
The obligations imposed on entities by this Act are primarily centered around the accurate determination of the taxable supply value and compliance with the conditions set out in Clause 6. Entities must ensure that the value of the taxable supply is established using a sales-based calculation process, and they must meet any additional requirements specified in the determination to issue a valid RCTI. The Act emphasizes the need for entities to maintain the integrity of the GST system while facilitating practical use of RCTIs by businesses.
For entities that fail to comply with the requirements of this determination, there are no explicit penalties mentioned within the explanatory statement. However, any breach of the conditions for issuing RCTIs could potentially lead to the invalidation of the tax invoice, resulting in compliance issues and possible disputes with the tax authorities. It is important for entities to adhere to the legislative requirements to avoid any disruptions in their invoicing and payment practices. The absence of specific penalties suggests that the primary enforcement mechanism is the invalidation of the tax invoice rather than financial or criminal penalties.