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Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 27) 2016 for Referrers, Spotters, Sub-intermediaries or Sub-agents for General Insurance

Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 27) 2016 for Referrers, Spotters, Sub-intermediaries or Sub-agents for General Insurance

Administered by Department of the Treasury

Legislation au F2016L00220 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 defined commission service and/or fee based service provided by a referrer, spotter, sub-intermediary or sub-agent in relation to general insurance to issue recipient created tax invoices (RCTIs) if the recipient determines the value of the taxable supply.
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 into 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 defined commission service and/or fee based service provided by a referrer, spotter, sub-intermediary or sub-agent in relation to general insurance may issue a RCTI for the supply if the recipient:

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 determination allows a recipient of a taxable supply of a defined commission based service and/or fee based service provided by a referrer, spotter, sub-intermediary or sub-agent in relation to general insurance, to issue a RCTI for 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 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 (RCTI) in relation to a referrer, spotter, sub-agent, or sub-intermediary in respect of general insurance business Determination (No. 64) 2000. The replaced instrument is repealed on 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

26 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. 27) 2016 for Referrers, Spotters, Sub-intermediaries or Sub-agents for General Insurance

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 commission based service and/or fee based service provided by a referrer, spotter, sub-intermediary or sub-agent in relation to general insurance to issue the tax invoice (called recipient created tax invoice) to the supplier, if the recipient determines the value of the taxable supply and satisfy and all other requirements of the Instrument. This will simplify the invoicing and payment processes for such transactions.

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. 27) 2016, made under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999, aims to address the practical challenges faced by recipients of certain services related to general insurance by allowing them to issue recipient created tax invoices (RCTIs). This determination was enacted to provide flexibility in the invoicing process while maintaining the integrity of the GST system. It allows recipients of taxable supplies of commission-based or fee-based services from referrers, spotters, sub-intermediaries, or sub-agents in the general insurance industry to issue RCTIs, provided they determine the value of the supply and meet other specified requirements. The objective is to streamline the invoicing process, thereby simplifying payment procedures for these transactions.

Scope and Application

The Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 27) 2016 pertains to the issuance of recipient created tax invoices (RCTIs) for certain services provided by referrers, spotters, sub-intermediaries, or sub-agents in the general insurance industry. This determination applies to recipients of taxable supplies of commission-based services and/or fee-based services in the general insurance sector, enabling them to issue RCTIs provided they establish the value of the taxable supply and meet the specified requirements. The purpose is to streamline invoicing and payment processes while ensuring the integrity of the GST system. The determination operates under the authority of the A New Tax System (Goods and Services Tax) Act 1999 and is considered minor or machinery in nature, resulting in minimal compliance costs. It replaces a previous determination and is compatible with human rights as it does not engage any of the applicable rights or freedoms.

Key Provisions

The main operative sections of this legislation (F2016L00220) concern the ability of recipients to issue recipient created tax invoices (RCTIs) under specific circumstances. According to section 7, recipients of taxable supplies involving commission services or fee-based services provided by referrers, spotters, sub-intermediaries, or sub-agents in the general insurance sector are permitted to issue RCTIs if they establish the value of the supply and meet all the requirements outlined in Clause 7 of the determination. This provision aims to streamline invoicing and payment processes by allowing recipients to issue tax invoices rather than requiring the supplier to do so, provided they satisfy the outlined criteria. The obligations imposed by the Act require recipients to determine the value of the taxable supply accurately and comply with all conditions set forth in the determination to issue an RCTI. This includes adhering to the requirements detailed in Clause 7, which likely include maintaining records and providing necessary documentation to support the invoice. By allowing recipients to issue RCTIs, the Act seeks to balance practical ease of use for businesses with the need to maintain the integrity of the GST system. There are no explicit offences, penalties, or civil/criminal consequences detailed within the explanatory statement for breaches of this determination. However, it is reasonable to infer that failure to comply with the requirements for issuing RCTIs, or inaccuracies in the determination of the value of the taxable supply, could lead to penalties under the A New Tax System (Goods and Services Tax) Act 1999. These penalties could include fines and other administrative actions taken by the Australian Taxation Office. While the explanatory statement does not specify maximum penalties, it is important to note that any non-compliance with GST regulations could attract the penalties prescribed under the GST Act, which can include substantial fines and, in severe cases, criminal charges.

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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