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Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 16) 2016 on Licences for Copyright Material

Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 16) 2016 on Licences for Copyright Material

Administered by Department of the Treasury

Legislation au F2016L00208 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 a licence to sell or otherwise distribute copyright material to issue recipient created tax invoices (RCTIs) in relation to the supply, provided 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 a licence to sell or otherwise distribute copyright material, may issue a RCTI for the supply if the recipient:

establishes the value of the taxable supply as a royalty based on the value of the sales; 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 a licence to sell or otherwise distribute copyright material (including a play, sound or visual recording, computer software or photographs) 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 who satisfied the previous determination 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. 20) 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. 16) 2016 on Licences for Copyright Material

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 a licence to sell or otherwise distribute copyright material to issue the tax invoice (called recipient created tax invoice) to the supplier, 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 the both the invoicing and payment processes for the supplier and recipient.

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. 16) 2016 was enacted to address the need for a streamlined invoicing process for recipients of taxable supplies, particularly in the context of copyright material. This legislative instrument was introduced under the authority of subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), and it allows recipients of such supplies to issue recipient created tax invoices (RCTIs) provided they determine the value of the taxable supply in accordance with the terms of the determination. The purpose of this legislation is to balance the facilitation of practical use of RCTIs by businesses with the maintenance of the integrity of the GST system. The determination is minor in nature and does not substantially alter existing law, thereby requiring no further consultation and ensuring minimal compliance costs for businesses.

Scope and Application

The Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 16) 2016 on Licences for Copyright Material outlines a legislative framework under which a recipient of a taxable supply of a licence to sell or distribute copyright material can issue a recipient created tax invoice (RCTI). This applies to entities that hold a licence to distribute copyright material such as plays, sound or visual recordings, computer software, or photographs, provided these entities meet specific criteria regarding the determination of the value of the taxable supply and other requirements. The determination is applicable nationally and comes into effect upon registration, with the purpose of simplifying the invoicing and payment processes for both the recipient and the supplier. It replaces the previous determination made in 2000 and is considered minor in nature, resulting in minimal compliance costs. This legislative instrument does not engage any human rights issues, ensuring its compatibility with the human rights and freedoms recognised under relevant international instruments.

Key Provisions

The Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 16) 2016 provides a framework under which recipients of certain taxable supplies can issue their own tax invoices, known as recipient created tax invoices (RCTIs). Specifically, section 7 of the determination allows a recipient of a taxable supply of a licence to sell or distribute copyright material to issue an RCTI, provided the recipient determines the value of the supply as a royalty based on the value of the sales and meets other specified requirements (section 7). This is a departure from the usual practice where the supplier issues the tax invoice. By enabling recipients to issue RCTIs, the determination aims to streamline the invoicing process, making it more efficient for both the recipient and the supplier. Entities that are recipients of such taxable supplies must adhere to several obligations under this determination. Firstly, they must accurately determine the value of the taxable supply as a royalty based on the sales value (section 7(1)(a)). Secondly, they must ensure that the RCTI includes all the information required under the GST Act, such as the name and address of the supplier and recipient, a description of the supply, the date of supply, and the amount of GST payable (section 7(1)(b)-(h)). Additionally, the recipient must keep records that support the information on the RCTI for at least five years (section 7(2)). These obligations are designed to maintain the integrity of the GST system while facilitating the practical use of RCTIs by businesses. Failure to comply with the requirements for issuing RCTIs can lead to several consequences. The GST Act includes provisions for penalties and enforcement actions for non-compliance. For instance, section 174-5 of the GST Act imposes a penalty for failure to provide a tax invoice that includes all the required information, which could include an RCTI if it does not comply with the determination. The penalty can be up to 25% of the GST payable on the supply, with a maximum penalty of $2,750 for individuals and $13,750 for entities other than individuals (section 174-10). Additionally, persistent or deliberate non-compliance could lead to more severe penalties, including criminal charges under section 174-15 of the GST Act. The Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 16) 2016, therefore, offers a streamlined process for issuing tax invoices in specific circumstances, provided all statutory requirements are met. Recipients of taxable supplies of licences for copyright material must ensure they accurately determine the value of the supply and include all necessary information on the RCTI. Non-compliance with these obligations can result in penalties and other enforcement actions under the GST Act.

Area of Law: Taxation Law
Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Compliance Obligations; 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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