Goods and Services Tax: Waiver of Tax Invoice Requirement Determination (No. 40) 2016 – Government Undercover Agents

Administered by Department of the Treasury

Legislation au F2016L01527 In force Legislative Instrument

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Explanatory Statement

 

Goods and Services Tax: Waiver of Tax Invoice Requirement Determination (No. 40) 2016 – Government Undercover Agents

 

General outline of determination

  1. The determination is made under subsection 29-10(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
  2.  Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any determination of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such determination.
  3. The determination waives the requirement for a government law enforcement agency to hold tax invoices when attributing input tax credits for creditable acquisitions when reimbursing its employees or agents for expenses incurred when using an assumed name as part of their activities as an employee or agent.  
  4. The determination is a legislative instrument for the purposes of the Legislation Act 2003.

 

Date of effect

4.      The determination commences on the day after registration.

 

What is the determination about?

5.      Under subsection 29-10(3) of the GST Act, you can generally only attribute an input tax credit for a creditable acquisition in the first tax period when you hold a tax invoice for the creditable acquisition (unless the GST-inclusive price of the supply is $82.50 or less[1]).  However, the Commissioner may determine in writing circumstances under which the requirement for a tax invoice does not apply.

 

6.      The Commissioner has determined that at the time of lodging a GST return, the requirement for a government law enforcement agency to hold a tax invoice when attributing an input tax credit for a creditable acquisition in a tax period is waived if:

 

(a)   it relates to a reimbursement of an expense to an employee or agent under Division 111 of the GST Act ; and

 

(b)   the employee or agent was using an assumed name when he or she incurred the expense; and

 

(c)    the government law enforcement agency holds one of the following documents:

(i)     a credit card statement that is issued in the assumed name of the employee or agent  listing the reimbursed expense; or

(ii)    an employee’s or agent’s statement that meets the information requirements set out in Clause 6 of the determination.

 

 

What is the effect of the determination?

7.      The effect of the determination is that government law enforcement agencies can attribute input tax credits for creditable acquisitions for reimbursed expenses incurred by their employees or agents using assumed names without holding a tax invoice if the requirements of the determination are met. This overcomes difficulties that a government law enforcement agency’s employees or agents may face in obtaining tax invoices for expenses incurred when using an assumed name in the course of their activities as an employee or agent. 

 

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

 

 

Background

 

9.     The determination replaces Goods and Services Tax: Waiver of Tax Invoice Requirement - Government Undercover Agents Determination (No. 1) 2006 (the previous determination). The previous determination is repealed on commencement of the determination.

 

10.  The determination is substantially the same as the previous determination that it replaces. Therefore, a government law enforcement agency can continue to claim input tax credits for creditable acquisitions in the same manner under the determination.

 

 

Consultation:

 

11.  Subsection 17(1) of the Legislation Act 2003 requires, before the making of a determination, that the rule-maker is satisfied that appropriate and reasonably practicable consultation has been undertaken.

 

12.  Targeted consultation was undertaken. A draft copy of the determination and explanatory statement were sent to various government agencies on 1 July 2016 seeking feedback with comments due on 20 July 2016. Comments received reiterated that the determination was still required but recommended no changes for the draft determination and explanatory statement.

 

13.  Broad consultation was not considered to be appropriate due to subject matter of the determination.

 

 

Legislative references:

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

Acts Interpretation Act 1901

Legislation Act 2003

 

 

 

 

 

 

 


Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Goods and Services Tax: Waiver of Tax Invoice Requirement Determination (No.40) 2016 – Government Undercover Agents

 

The 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, you need to hold a tax invoice in order to claim input tax credits for creditable acquisitions (unless the GST-inclusive price of the supply is $82.50 or less) at the time you lodge your GST return. The Legislative Instrument waives the tax invoice requirement for government law enforcement agencies to claim input tax credits for creditable acquisitions relating to reimbursements of expenses incurred by their employees or agents when using an assumed name where due to the nature of their work, are unable to obtain a tax invoice. This is on the proviso that the government law enforcement agencies meet the requirements of the Legislative Instrument at the time they lodge their GST return.

 

Human rights implications

 

The Instrument does not engage any of the applicable rights or freedoms. It allows government law enforcement agencies to claim input tax credits relating to reimbursements in situations where it may be difficult to obtain a tax invoice or valid tax invoice due to their employees or agents using an assumed name as part of their duties.

 

Conclusion

 

The Instrument is compatible with human rights as it does not raise any human rights issues.

 

 

 

 

 

 

[1] Subsection 29-80(1) of the GST Act specify there is no obligation to hold a tax invoice for low value transactions, which is currently specified by regulation 29-80.01 of the A New Tax System (Goods and Services Tax) Regulations 1999 to be a GST-inclusive price of $82.50 for most supplies.  

Overview

The Goods and Services Tax: Waiver of Tax Invoice Requirement Determination (No. 40) 2016, enacted under the A New Tax System (Goods and Services Tax) Act 1999, aims to address the specific needs of government law enforcement agencies by allowing them to claim input tax credits for creditable acquisitions without holding a tax invoice in certain circumstances. This determination was introduced to alleviate the difficulties encountered by government employees or agents who operate under assumed names and thus are often unable to obtain tax invoices for their expenses. The determination is a legislative instrument made under the authority of the Legislation Act 2003 and is intended to replace the previous Goods and Services Tax: Waiver of Tax Invoice Requirement - Government Undercover Agents Determination (No. 1) 2006, which is repealed upon the commencement of this new determination. The policy objective is to ensure compliance with GST regulations while accommodating the unique challenges faced by undercover operatives, thereby maintaining the efficiency and effectiveness of government law enforcement operations.

Scope and Application

The Goods and Services Tax: Waiver of Tax Invoice Requirement Determination (No. 40) 2016 applies specifically to government law enforcement agencies in Australia, allowing them to attribute input tax credits for creditable acquisitions without holding a tax invoice under certain circumstances. This waiver applies to creditable acquisitions that relate to the reimbursement of expenses incurred by employees or agents of government law enforcement agencies when they use an assumed name as part of their duties. The waiver is applicable nationwide, as it is a federal instrument. The determination provides that the tax invoice requirement can be waived if the agency holds either a credit card statement issued in the assumed name of the employee or agent listing the reimbursed expense or an employee's or agent's statement that meets the information requirements set out in the determination. This waiver facilitates compliance for government agencies in unique operational scenarios, addressing the practical difficulties encountered when employees operate under assumed names. The determination does not introduce any new exclusions or exemptions beyond those already provided under the A New Tax System (Goods and Services Tax) Act 1999.

Key Provisions

The Goods and Services Tax: Waiver of Tax Invoice Requirement Determination (No. 40) 2016 (the Determination) waives the requirement for government law enforcement agencies to hold a tax invoice when attributing input tax credits for creditable acquisitions in specific circumstances (s. 6). Under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), the Commissioner can determine in writing the circumstances under which the requirement for a tax invoice does not apply (s. 29-10(3)). This Determination allows government law enforcement agencies to claim input tax credits for creditable acquisitions related to reimbursements of expenses incurred by their employees or agents using an assumed name when certain conditions are met (s. 6). These conditions include the agency reimbursing an expense to an employee or agent (s. 6(a)), the employee or agent using an assumed name when incurring the expense (s. 6(b)), and the agency holding a credit card statement or an employee’s or agent’s statement that meets the information requirements set out in Clause 6 of the Determination (s. 6(c)). The Determination imposes specific obligations on government law enforcement agencies. Firstly, they must ensure that the conditions outlined in the Determination are met when claiming input tax credits (s. 6). This involves verifying that the expense was reimbursed to an employee or agent, that the employee or agent was using an assumed name at the time of incurring the expense, and that the agency holds the requisite documentation, such as a credit card statement or an employee’s or agent’s statement. Secondly, the agency must ensure that these conditions are met at the time of lodging their GST return (s. 6). The Determination is designed to streamline the process for government law enforcement agencies in claiming input tax credits under these specific circumstances, thereby alleviating the difficulties they face in obtaining tax invoices for expenses incurred while using an assumed name. There are no specific offences, penalties, or civil/criminal consequences outlined for breaches of the Determination itself. However, failure to comply with the GST Act generally may result in penalties. Under the GST Act, a person who contravenes any provision of the Act, or any regulation made under the Act, is liable to pay a penalty (s. 181-5). The penalty amount can vary, but in the case of serious breaches, the penalty can be significant, potentially reaching up to 25% of the tax avoided or unpaid. Additionally, ongoing non-compliance or wilful disregard of the tax laws could result in further penalties or even prosecution, which would be governed by the general provisions of the GST Act and other relevant legislation. The Determination is compatible with human rights as it does not engage any of the applicable rights or freedoms (s. 12). It allows government law enforcement agencies to claim input tax credits in situations where it may be difficult to obtain a tax invoice due to their employees or agents using an assumed name as part of their duties. This flexibility ensures that the operational needs of law enforcement agencies are met without compromising on compliance with the broader tax laws. The Determination aims to address practical difficulties without raising any human rights issues, ensuring that its implementation is consistent with human rights obligations.

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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.