Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 25) 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 horse breeders’ incentive scheme operator to issue Recipient Created Tax Invoices (RCTIs) to a supplier of horses for racing if the operator 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 horse breeders' incentive scheme operator who is the recipient of a taxable supply, may issue a tax invoice that belongs to a class of tax invoices for a taxable supply of horses for racing where:
- the recipient establishes the value of the supply rather than the supplier; 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 horse breeders' incentive scheme operator to issue RCTIs to suppliers of horses for racing. The operator 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. 8) 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 The replaced instrument is repealed on the commencement of this determination.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. 25) 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 horse breeders' incentive scheme operators to issue Recipient Created Tax Invoices (RCTIs) to suppliers of horses for racing, 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. 25) 2015 was enacted to address the need for streamlined invoicing and payment practices within the horse racing industry, particularly concerning horse breeders' incentive scheme operators. This legislative instrument, made under the A New Tax System (Goods and Services Tax) Act 1999, allows horse breeders' incentive scheme operators to issue Recipient Created Tax Invoices (RCTIs) to suppliers of horses for racing, provided the operator determines the value of the taxable supply and meets the specified requirements. This determination aims to balance the practical use of RCTIs by businesses with the integrity of the GST system, thereby facilitating smoother transactions while maintaining compliance with tax regulations. The instrument was developed considering minimal compliance costs and was deemed minor or machinery in nature, thus not requiring further consultation beyond the legislative process.
Scope and Application
The Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 25) 2015, made under the A New Tax System (Goods and Services Tax) Act 1999, applies to horse breeders’ incentive scheme operators who are recipients of taxable supplies involving the supply of horses for racing. These operators are permitted to issue Recipient Created Tax Invoices (RCTIs) if they determine the value of the taxable supply and meet specific criteria outlined in Clause 6 of the determination. This instrument is intended to balance the practical use of RCTIs by businesses with the need to maintain the integrity of the GST system. The determination does not apply retrospectively and will streamline the invoicing and payment practices of the operators. Compliance costs are expected to be minimal due to the minor nature of the legislative instrument. It is a Commonwealth instrument and replaces an older determination, which is repealed upon the commencement of this current determination. As the instrument is considered minor or machinery in nature, with no substantive change from the previous instrument, no further consultation was undertaken.
Key Provisions
The main operative sections of the Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 25) 2015 (the Determination) are primarily concerned with the creation and issuance of Recipient Created Tax Invoices (RCTIs) by horse breeders' incentive scheme operators. Under section 7 of the Determination, a horse breeders' incentive scheme operator can issue an RCTI to a supplier of horses for racing if the operator determines the value of the supply, rather than the supplier, and satisfies certain conditions set out in Clause 6 of the legislative instrument. This provision is designed to streamline the invoicing and payment processes for these operators, provided they have the necessary expertise and access to information to accurately calculate the supply's value.
The Determination imposes several obligations on the parties it governs. Firstly, horse breeders' incentive scheme operators must establish the value of the taxable supply themselves, which requires a certain level of expertise and knowledge. Secondly, they must ensure that the RCTIs they issue comply with the requirements outlined in Clause 6 of the Determination, which may include specific details and information that must be included on the invoice. These obligations are intended to maintain the integrity of the GST system while allowing for more efficient invoicing practices.
In terms of consequences for non-compliance, the Determination does not explicitly outline specific offences, penalties, or consequences for breaches. However, the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act) does provide for general penalties for non-compliance with tax laws. For example, under section 200-5 of the GST Act, a person who fails to comply with a provision of the GST Act can be liable for a penalty of up to 25% of the amount of GST that should have been charged or paid, but was not. In more serious cases, criminal penalties may apply, including fines and imprisonment. The Determination itself is considered minor or machinery in nature, with no or minimal impacts on implementation and ongoing compliance costs.
The Determination also includes a Statement of Compatibility with Human Rights, prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. The Statement concludes that the Determination is compatible with human rights as it does not raise any human rights issues, and does not engage any of the applicable rights or freedoms. This ensures that the Determination operates within the framework of Australia's commitment to human rights and freedoms, as recognised or declared in international instruments.