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Goods and Services Tax: Recipient Created Tax Invoice Determination 2017 for Ceding Insurers or Reinsurers

Goods and Services Tax: Recipient Created Tax Invoice Determination 2017 for Ceding Insurers or Reinsurers

Administered by Department of the Treasury

Legislation au F2017L00353 Not in force Legislative Instrument

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Explanatory Statement

General outline of determination

This 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.
This determination allows a ceding insurer or reinsurer to issue recipient created tax invoices (RCTIs) in certain circumstances.

4. This determination is a legislative instrument for the purposes of the Legislation Act 2003.

Date of effect

5. This determination commences on the day after its registration on the Federal Register of Legislation.

What is this determination about

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

7. The purpose of this 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. These factors reflect a balance between facilitating the practical use of RCTIs by businesses and maintaining the integrity of the GST system.

8. In accordance with the determination, a ceding insurer or reinsurer that is a recipient of a taxable supply of reinsurance or retrocession may issue a RCTI for the taxable supply if the entity:

(a) establishes the value of the taxable supply rather than the supplier, and

(b) satisfies the requirements set out in paragraph 6 of the determination.

What is the effect of this determination

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

10. This determination is substantially the same as the previous determination that it replaces. An entity that satisfied the requirements of the previous determination and that is a ceding insurer or reinsurer will generally satisfy the requirements of this determination.

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

Background

12. This determination replaces A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice (RCTI) for supplies of reinsurance or supplies of retrocession Determination (No. 30) 2000 – F2006B11594 (previous determination) – registered on 17 November 2006. The previous determination is repealed on commencement of this determination.

Consultation

13. 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.

14. 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 Ceding Insurers or Reinsurers

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. The Legislative Instrument allows a ceding insurer or reinsurer that is a recipient of a taxable supply of reinsurance or retrocession 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: Recipient Created Tax Invoice Determination 2017 for Ceding Insurers or Reinsurers, enacted under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999, aims to address the need for streamlined invoicing processes within the insurance and reinsurance sectors. This legislative instrument, created by the Australian Government, permits ceding insurers or reinsurers to issue recipient created tax invoices (RCTIs) when they are recipients of a taxable supply of reinsurance or retrocession, provided they establish the value of the supply and meet certain specified criteria. This determination seeks to balance practical business requirements with the integrity of the GST system, reducing compliance costs and maintaining simplicity in the invoicing process for eligible entities. The policy objective is to facilitate efficient payment and invoicing procedures while ensuring the accuracy and reliability of tax documentation.

Scope and Application

The Goods and Services Tax: Recipient Created Tax Invoice Determination 2017 for Ceding Insurers or Reinsurers applies to ceding insurers or reinsurers that are recipients of taxable supplies of reinsurance or retrocession under the A New Tax System (Goods and Services Tax) Act 1999. This determination permits these entities to issue recipient created tax invoices (RCTIs) in certain circumstances, which is a departure from the general rule that tax invoices are issued by the entity making the taxable supply. To qualify for issuing an RCTI, a ceding insurer or reinsurer must establish the value of the taxable supply and meet specific criteria outlined in the determination, such as industry type, the nature of the taxable supply, and the recipient's GST turnover. This legislative instrument operates within the Commonwealth jurisdiction and is designed to balance the practical needs of businesses with the integrity of the GST system. The determination streamlines the payment and invoicing processes by allowing the recipient of a taxable supply to issue the tax invoice if they possess the necessary information to establish its value. The determination is minor in nature, with minimal compliance costs expected.

Key Provisions

Under the Goods and Services Tax: Recipient Created Tax Invoice Determination 2017 for Ceding Insurers or Reinsurers (the "Determination"), ceding insurers or reinsurers are permitted to issue recipient created tax invoices (RCTIs) for taxable supplies of reinsurance or retrocession, subject to certain conditions (sections 8 and 9). The Determination allows ceding insurers or reinsurers to issue tax invoices if they establish the value of the taxable supply and meet the requirements set out in the Determination. The purpose of the Determination is to streamline payment and invoicing processes by allowing recipients with the information to establish the value of the supply to issue the tax invoice. The Determination imposes several obligations on ceding insurers or reinsurers that wish to issue RCTIs. They must establish the value of the taxable supply rather than relying on the supplier to do so (section 8(a)). They must also satisfy the requirements outlined in paragraph 6 of the Determination, which include having a GST turnover of $10 million or less in the 12 months preceding the taxable supply (section 6(2)). Additionally, the ceding insurer or reinsurer must ensure that the RCTI includes certain prescribed details such as the date of issue, a description of the supply, the amount of GST payable, and the name and address of the supplier (section 28-11 of the GST Act). The Determination does not outline any specific offences or penalties for breach. However, any breach of the GST Act, including failure to issue a tax invoice or issuing an incorrect tax invoice, could result in civil or criminal penalties. Under the GST Act, civil penalties can include a penalty equal to the amount of unpaid GST plus interest and other charges. Criminal penalties can include fines and imprisonment for serious or repeated breaches. The maximum penalties for contravening the GST Act are set out in the GST Act itself. In summary, the Determination allows ceding insurers or reinsurers to issue RCTIs for taxable supplies of reinsurance or retrocession, subject to certain conditions. It imposes obligations on those entities to establish the value of the supply and satisfy the requirements in the Determination. While the Determination itself does not outline specific penalties for breach, contravention of the GST Act more broadly can attract civil and criminal penalties.

Area of Law: Taxation Law
Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Regulatory Standards; 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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