Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No.19) 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 a recipient of a land product to issue Recipient Created Tax Invoices (RCTIs) to the supplier 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 recipient of a taxable supply may issue a tax invoice that belongs to a class of tax invoices for a taxable supply of a land product where:
- the recipient establishes the value of the taxable supply; 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 recipients of land products to issue RCTIs to suppliers. The recipient has 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. 26) 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 The replaced instrument is repealed on the commencement of this determination.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. 19) 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 certain recipients of land product to issue Recipient Created Tax Invoices (RCTIs) to suppliers of the taxable supply, 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. 19) 2015 was enacted to streamline the process of issuing tax invoices for certain taxable supplies, particularly land products. This legislative instrument, made under the A New Tax System (Goods and Services Tax) Act 1999, empowers recipients who determine the value of a taxable supply to issue a Recipient Created Tax Invoice (RCTI) to their suppliers, provided they meet the specified criteria. This initiative aims to balance practical business needs with the integrity of the GST system, ensuring that only qualified recipients can issue such invoices. The determination was introduced by the Commissioner of Taxation, reflecting a minor legislative change that does not substantially alter existing law, and therefore did not require further consultation. The instrument is designed to have minimal compliance costs and does not engage any human rights issues, thereby maintaining compatibility with human rights as declared in the Human Rights (Parliamentary Scrutiny) Act 2011.
Scope and Application
The Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No.19) 2015, made under the A New Tax System (Goods and Services Tax) Act 1999, applies to recipients of taxable supplies of land products who determine the value of the supply. This determination permits such recipients to issue Recipient Created Tax Invoices (RCTIs) to their suppliers, provided they meet specific requirements outlined in Clause 6 of the legislative instrument. The Act balances the practical use of RCTIs by businesses with the need to maintain the integrity of the GST system. Geographically, this instrument applies across Australia and is administered by the Commonwealth. It does not apply retrospectively and replaces a previous determination, which is repealed upon the commencement of this one. The instrument is considered minor or machinery in nature, with no substantive changes from the previous legislation, thus consultation was not deemed necessary. The instrument is compatible with human rights as it does not engage any of the rights or freedoms declared in relevant international instruments.
Key Provisions
The Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 19) 2015 (the Determination) is a legislative instrument made under section 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999. The Determination allows recipients of a land product to issue Recipient Created Tax Invoices (RCTIs) to the supplier if the recipient determines the value of the taxable supply. This applies when the recipient satisfies the requirements set out in Clause 6 of the Determination, such as maintaining records of the taxable supply for a period of five years. The primary objective of this Determination is to balance facilitating the practical use of RCTIs by businesses while maintaining the integrity of the GST system.
The Determination imposes obligations on parties involved in the issuance of RCTIs. Firstly, it mandates that the recipient of the land product must establish the value of the taxable supply. Secondly, the recipient must satisfy the requirements stipulated in Clause 6 of the Determination, including maintaining records for a specified period. This ensures that both the recipient and the supplier comply with the GST regulations, thereby maintaining the integrity of the tax system.
There are no specific offences, penalties, or civil/criminal consequences outlined in the Determination for breaching its provisions. However, failure to comply with the GST Act or the requirements of this Determination could result in penalties under the GST Act itself. For instance, knowingly or recklessly providing a tax invoice that does not comply with the requirements can lead to penalties, including fines of up to 100 penalty units ($21,750 as of 2023) for individuals and higher for corporations. Additionally, persistent non-compliance may result in further enforcement actions by the Australian Taxation Office.
The Determination is considered minor or machinery in nature, with no or minimal impacts on implementation and ongoing compliance costs. As such, it does not require further consultation beyond what is stipulated in the Legislative Instruments Act 2003. This is because the Determination does not substantially change the existing law, and it aligns with the human rights and freedoms recognised in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011. This compatibility ensures that the Determination does not raise any human rights issues and allows for the streamlining of invoicing and payment practices.