Australian Tax Invoice Requirements

The seven details for sales under $1,000

The ATO states that a tax invoice for a taxable sale of less than $1,000 must include enough information to clearly determine seven things. "Clearly determine" is a slightly softer test than a rigid field list, but in practice the safest reading is that each of the seven appears explicitly on the document.

• That the document is intended to be a tax invoice
• The seller's identity
• The seller's Australian Business Number (ABN)
• The date the invoice was issued
• A brief description of the items sold, including the quantity where applicable and the price
• The GST amount payable, if any
• The extent to which each sale on the invoice is a taxable sale

Sales of $1,000 or more

Above that threshold there is one addition: the invoice must also show the buyer's identity or their ABN. Everything else stays the same.

The practical advice from the ATO is to build one template that meets the higher requirement and use it for everything. A tax invoice that satisfies the $1,000-and-over rules is valid for smaller sales too, and it removes any question about which version you should have sent.

When you have to provide one

If a customer asks for a tax invoice you must provide one within 28 days of the request, unless the sale is for $82.50 including GST or less. That same $82.50 figure is the point above which a buyer needs a tax invoice in hand to claim a GST credit.

The document does not have to be paper. A PDF emailed to the customer is a valid tax invoice provided it contains everything required. Australia has also adopted the Peppol framework for eInvoicing, and the ATO treats a compliant Peppol invoice as satisfying the "intended to be a tax invoice" requirement even where those words do not appear on it.

Mixed taxable and GST-free sales

Where one invoice carries both taxable and non-taxable items, it must clearly show which items are taxable, the amount of GST to be paid, and the total amount payable. Items are non-taxable when they are GST-free or input-taxed, and lumping them in with taxable lines is what makes an invoice fail.

This is the case for per-line tax rather than a single document-wide rate. If a document mixes GST-free freight with standard-rated goods, the invoice has to say so line by line.

GST rounding

Where GST works out to a fraction of a cent, specific rules apply. With a single taxable sale on the invoice, round the GST to the nearest cent with half a cent rounding up.

With more than one taxable sale there are two permitted approaches. Under the total invoice rule you total first and then round. Under the taxable supply rule you work out GST for each sale, round each as your accounting system requires, then add and round the total. You and your customer do not have to use the same rule.

Recipient-created tax invoices

In some industries the buyer issues the invoice rather than the seller. That is a recipient-created tax invoice, and it is only valid where both parties are registered for GST at the time it is issued, both have agreed in writing that the buyer will issue it and the seller will not, that agreement is current, and the Commissioner has determined that this type of supply can be invoiced this way.

An RCTI must also show both ABNs, make clear that it is a recipient-created tax invoice rather than a standard one, and state that any GST is payable by the supplier. The recipient must issue it to the supplier within 28 days.

Australian tax invoices: common questions

Sources

1. Tax invoices — Australian Taxation Office
2. Setting up your business invoices — Australian Taxation Office

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