Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No.26) 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 Direct Selling Association of Australia Inc (DSAA) member to issue Recipient Created Tax Invoices (RCTIs) to a recruiting distributor if the DSAA member 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 Direct Selling Association of Australia Inc (DSAA) member 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 by a recruiting distributor 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 a Direct Selling Association of Australia (DSAA) member to issue RCTIs to a recruiting distributor for a taxable supply. The DSAA member 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. 9) 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 The replaced instrument is repealed on the commencement of this determination.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. 26) 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 A Direct Selling Association of Australia Inc (DSAA) member to issue Recipient Created Tax Invoices (RCTIs) to a recruiting distributor, if the DSAA member 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. 26) 2015 was enacted to address the need for streamlined invoicing and payment practices within the Direct Selling Association of Australia Inc (DSAA) industry. This legislative instrument was created under the authority of subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999, with the objective of facilitating the practical use of Recipient Created Tax Invoices (RCTIs) while maintaining the integrity of the GST system. The determination allows DSAA members, as recipients of taxable supplies, to issue RCTIs to recruiting distributors provided they establish the value of the supply and meet the specified requirements. The instrument, which is minor or machinery in nature, aims to streamline the invoicing processes for DSAA members without substantially altering the law, and as such, it was not subject to further consultation. The instrument is compatible with human rights as it does not engage any applicable rights or freedoms.
Scope and Application
This legislation, Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 26) 2015, applies to members of the Direct Selling Association of Australia Inc (DSAA), allowing them to issue Recipient Created Tax Invoices (RCTIs) to recruiting distributors, provided the value of the taxable supply is established by the DSAA member and the requirements outlined in Clause 6 of the legislative instrument are met. The instrument is designed to facilitate practical use of RCTIs by businesses while maintaining the integrity of the Goods and Services Tax (GST) system. This determination operates under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999 and is a legislative instrument under the Legislative Instruments Act 2003. It does not apply retrospectively and replaces the previous A New Tax System (Goods and Services Tax) 1999 Classes of Recipient Created Tax Invoice Determination (No. 9) 2000, which is repealed upon the commencement of this determination. The instrument is considered minor or machinery in nature, leading to no substantive change from the previous instrument and therefore not requiring further consultation.
Key Provisions
The Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 26) 2015 (the Determination) primarily outlines the conditions under which members of the Direct Selling Association of Australia Inc. (DSAA) can issue Recipient Created Tax Invoices (RCTIs) to recruiting distributors. Under section 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999, the Commissioner of Taxation has the authority to determine classes of tax invoices that may be issued by recipients. This Determination allows a DSAA member, who is the recipient of a taxable supply, to issue an RCTI to a recruiting distributor, provided the DSAA member determines the value of the supply and satisfies the specified requirements, as outlined in Clause 6 of the Determination. This provision aims to facilitate practical use of RCTIs by businesses while maintaining the integrity of the GST system.
The Determination imposes several obligations on the parties involved. A DSAA member who issues an RCTI must ensure that the value of the taxable supply is accurately determined. Additionally, the DSAA member must comply with the requirements stipulated in Clause 6 of the Determination, which include maintaining records of the taxable supply, the value determined, and the issuance of the RCTI. These obligations are designed to ensure that the tax invoices are issued correctly and that the GST system remains effective and reliable.
Failure to comply with the requirements set out in the Determination may result in civil or criminal consequences. While specific penalties are not detailed in the explanatory statement, breaches of GST laws can generally lead to civil penalties, which may include fines, and in severe cases, criminal penalties, which may include imprisonment. The exact penalties depend on the nature and extent of the breach and are determined in accordance with the relevant tax legislation.
This Determination does not substantially change existing law and is therefore considered minor or machinery in nature. Consequently, no further consultation was deemed necessary, as per section 18 of the Legislative Instruments Act 2003. The Determination is compatible with human rights as it does not engage any of the applicable rights or freedoms and allows for the streamlining of current invoicing and payment practices without raising any human rights issues.