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Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 10) 2016 for Labour Services

Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 10) 2016 for Labour Services

Administered by Department of the Treasury

Legislation au F2016L00209 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).
The determination allows a recipient of a taxable supply of labour services to issue recipient created tax invoices (RCTIs) in relation to the supply, if the recipient determines the value of the taxable supply as set out in the determination.
The determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Date of effect

4. The determination commences on the day after registration.

What is this determination about:

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

6. The purpose of this determination is to outline a class of tax invoices that the Commissioner has determined may be issued by recipients of taxable supplies (called RCTIs). The Commissioner makes the determination by taking account a number of factors including the type of industry, the taxable supply, the 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. In accordance with this determination, a recipient of a taxable supply of labour services may issue a RCTI for the supply if the recipient:

establishes the value of the taxable supply of the labour services after the supply is made using a calculation process; and
satisfies the requirements set out in Clause 7 of the determination.

What is the effect of this determination

8. The determination allows a recipient of a taxable supply of labour services to issue a RCTI in relation to the supply, provided the requirements of the determination are satisfied. As the recipient has the information to establish the value of the supply, issuing RCTIs for such supplies will simplify payment and invoicing processes.

9. This determination is substantially the same as the previous determination that it replaces. Therefore, a recipient of labour services who satisfied the previous determination will satisfy this determination and can continue to issue RCTIs under this determination.

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

Background

11. This determination replaces A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 22) 2000.The replaced instrument is repealed on the commencement of this determination.

Consultation:

12. 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.

13. In this case, no further consultation has been undertaken in the development of this determination because there is no substantive change from the previous determination and it is considered minor or machinery in nature.

Legislative references:

A New Tax System (Goods and Services Tax) Act 1999

Legislative Instruments Act 2003

Timothy Dyce

Deputy Commissioner of Taxation

[24 February 2016]

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 (No. 10) 2016 for Labour Services

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

Generally, tax invoices are issued by a supplier under the basic rules for GST. This Legislative Instrument allows a recipient of a taxable supply of labour services to issue the tax invoice (called recipient created tax invoice) if the recipient determines the value of the taxable supply in the manner set out under the Legislative Instrument and all other requirements of the Instrument are satisfied. This will simplify both the invoicing and payment processes for the recipient and the supplier of the labour services.

Human rights implications

This Instrument does not engage any of the applicable rights or freedoms. It allows for the streamlining of 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: Recipient Created Tax Invoice Determination (No. 10) 2016 for Labour Services was enacted to provide a streamlined approach to invoicing for labour services within the framework of the A New Tax System (Goods and Services Tax) Act 1999. This determination was introduced by the Australian Government to address the need for practical solutions in the invoicing process for labour services while maintaining the integrity of the GST system. The determination was issued under subsection 29-70(3) of the GST Act by the Commissioner of Taxation, Timothy Dyce, and outlines the conditions under which a recipient of labour services can issue a recipient created tax invoice (RCTI). This approach aims to balance the practical needs of businesses with the requirements of the GST system, thereby simplifying the invoicing process for both recipients and suppliers of labour services.

Scope and Application

The Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 10) 2016 for Labour Services, which is established under the A New Tax System (Goods and Services Tax) Act 1999, pertains to entities or individuals who are recipients of taxable supplies of labour services within Australia. This legislative instrument allows such recipients to issue recipient created tax invoices (RCTIs) for these supplies, provided they adhere to the stipulated value determination process and other specified requirements. The intent is to streamline the invoicing and payment processes for both the recipients and the suppliers of labour services, thereby facilitating smoother financial transactions. The determination is applicable nationally across Australia and is intended to maintain the integrity of the GST system while balancing the practical needs of businesses. The determination applies to any recipient of labour services who determines the value of the supply post-delivery, following a prescribed calculation method, and meets all the requirements outlined in Clause 7 of the determination. This includes industries that engage in labour-intensive services and businesses with certain GST turnovers. Notably, the legislation does not substantially alter the existing legal framework, classifying it as minor or machinery in nature, and thus exempt from further consultation requirements. The previous determination it replaces is repealed upon the commencement of this new instrument, ensuring a seamless transition for those already complying with the prior regulations.

Key Provisions

The Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 10) 2016 for Labour Services (the Determination) is a legislative instrument made under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). The key provision of the Determination is that it allows a recipient of a taxable supply of labour services to issue a recipient created tax invoice (RCTI) if the recipient determines the value of the supply in accordance with the Determination (Clause 7). This means that under certain conditions, the entity receiving the labour services can issue the tax invoice, rather than the entity supplying the labour services. The Determination imposes several obligations on recipients of labour services who wish to issue RCTIs. Firstly, the recipient must establish the value of the taxable supply of labour services after the supply is made using a calculation process. Secondly, the recipient must satisfy all the requirements set out in Clause 7 of the Determination. The Determination also specifies that the recipient must ensure that the RCTI contains all the necessary information as outlined in the GST Act (subsection 28-20(1)). Failure to comply with these requirements may result in the RCTI being invalid, and the recipient may be liable for any resulting GST liabilities. There are no specific offences, penalties, or civil/criminal consequences mentioned in the Determination for breach of its provisions. However, the Determination does note that it is compatible with human rights and does not raise any human rights issues. It is important to note that the Determination is minor or machinery in nature and does not substantially change the law. Therefore, the Determination does not impose any significant penalties or consequences for breach of its provisions. However, if a recipient fails to issue a valid RCTI or does not comply with the requirements of the Determination, they may be liable for any resulting GST liabilities. It is essential for recipients of labour services to understand and comply with the requirements of the Determination to avoid any potential GST liabilities.

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

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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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