Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 17) 2016 for Publishers

Overview

The Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 17) 2016 was enacted to address a specific gap in the tax invoice issuance process for publishers of authors' publications under the A New Tax System (Goods and Services Tax) Act 1999. This determination was introduced by the Australian Parliament to facilitate more efficient invoicing and payment processes for publishers and authors alike, while ensuring the integrity of the GST system is maintained. The policy objective of this determination is to enable publishers to issue recipient created tax invoices (RCTIs) to authors, provided certain criteria are met, thereby simplifying the invoicing process and reducing compliance costs. The determination is a legislative instrument made under the authority of the Legislative Instruments Act 2003.

Scope and Application

The Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 17) 2016 applies to publishers who are recipients of a taxable supply of an author's publication, allowing them to issue a recipient created tax invoice (RCTI) to the author under certain conditions. This legislative instrument is made under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999 and operates nationally across Australia. The primary requirement for the application of this determination is that the publisher must establish the value of the taxable supply as a royalty based on the value of sales of the author’s publication and satisfy the additional requirements set out in Clause 7 of the determination. The legislation is designed to streamline the invoicing and payment processes by enabling the publisher, who typically has the requisite information, to issue the tax invoice directly. This approach balances the practical needs of businesses with the integrity of the GST system. The determination is minor and machinery in nature, with no substantive change from its predecessor, hence it does not engage any human rights issues and is deemed compatible with the human rights and freedoms recognised in international instruments.

Key Provisions

The Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 17) 2016 (the Determination) under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) allows a publisher, who is the recipient of a taxable supply of an author’s publication, to issue a recipient created tax invoice (RCTI) to the author if the publisher establishes the value of the taxable supply as a royalty based on the value of sales of the author’s publication and meets the requirements set out in Clause 7 of the Determination (sections 7–9). The Determination provides a mechanism for publishers to issue tax invoices to authors in circumstances where the publisher has the necessary information to establish the value of the supply, thereby simplifying the invoicing and payment processes for both parties (sections 5–9). The Determination imposes several obligations on publishers to ensure compliance. Publishers must determine the value of the taxable supply as a royalty based on the sales value of the author’s publication (section 7). They must also satisfy the specific requirements outlined in Clause 7 of the Determination, which may include maintaining records and providing documentation to support the value determined (section 7). Additionally, publishers are required to issue RCTIs in accordance with the provisions of the GST Act and any other relevant legislation (section 9). Failure to comply with the requirements of the Determination may result in various consequences. Under the GST Act, incorrect or misleading tax invoices can lead to penalties for both the issuer and the recipient. The penalties for issuing an incorrect tax invoice can include a civil penalty of up to $2,220 for individuals and $11,100 for other entities, as well as potential criminal penalties if the offence is deemed serious (section 28-10). The Determination itself does not specify additional penalties but references the GST Act for compliance and enforcement measures (section 9). In summary, the Determination allows publishers to issue RCTIs under specific conditions, with the primary requirement being the accurate determination of the value of the taxable supply. Compliance with the Determination’s requirements is essential to avoid penalties under the GST Act, which can include both civil and criminal sanctions for non-compliance. The Determination streamlines the invoicing process for publishers and authors by clarifying the circumstances under which RCTIs can be issued.