Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 13) 2016 for Workers Compensation Insurance provided by Coal Mines Insurance Pty Ltd

General outline of determination

1. This determination is made under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
2. The determination allows a policy holder of a taxable supply of workers compensation insurance provided by Coal Mines Insurance Pty Ltd to issue recipient created tax invoices (RCTIs) to the supplier if the policy holder determines the value of the taxable supply as set out in the determination.
3. 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 policy holder who is a recipient of a taxable supply of workers compensation insurance from Coal Mines Insurance Pty Ltd may issue a RCTI for the supply if the policy holder:

• establishes the value of the taxable supply; and
• satisfies the requirements set out in Clause 7 of the determination.

What is the effect of this determination

8.      The effect of this determination is to allow a policy holder of a taxable supply of workers compensation insurance from Coal Mines Insurance Pty Limited to issue a RCTI to the supplier provided the requirements of the determination are satisfied. As the policy holder 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 but takes account of the fact that the Joint Coal Board of New South Wales was subsumed by the newly formed Coal Services Pty Ltd in 2002.  Therefore, a policy holder who satisfied the previous determination in relation to a taxable supply of workers compensation insurance provided by the Joint Coal Board of New South Wales, will satisfy this determination in relation to a taxable supply of workers compensation insurance provided by Coal Mines Insurance Pty Ltd (a wholly owned subsidiary of Coal Services Pty Ltd) 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. 28) 2000. The replaced instrument will be repealed on commencement of this determination.

Consultation:

12.  Consultation has been undertaken with Coal Services Pty Ltd to ensure the accuracy and relevancy of the determination.

Legislative references:

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

Legislation Act 2003

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. 13) 2016 for Workers Compensation Insurance

provided Coal Mines Insurance Pty Ltd

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 policy holder of a taxable supply of workers compensation insurance provided by Coal Mines Insurance Pty Ltd to issue the tax invoice (called recipient created tax invoice) to the supplier, if the policy holder 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 invoicing and payment processes for both the policy holder and supplier.

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.