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Additional Requirements For Issuing Invoices

Terms the ATO uses

When referring to:

  • sales: the GST term supplies
  • seller: the business or entity that makes the sale of a good or service or the GST term supplier
  • purchaser: the business or entity that purchases goods or services or the GST term recipient

What is a valid RCTI?

For an RCTI to be valid, both the seller and the purchaser must meet a number of conditions, including:

  • the seller and the purchaser must be registered for GST
  • the purchaser must include the ABN of the seller on the RCTI
  • the purchaser must issue the RCTI (or a copy) to the seller within 28 days of the sale or within 28 days of establishing the price
  • the purchaser must keep the RCTI (or a copy)
  • the purchaser must issue an adjustment note (or a copy) to the seller within 28 days of any adjustment occurring
  • the purchaser must reasonably comply with their general tax obligations, such as being up to date with lodgment of activity statements and payments
  • the purchaser must not issue an RCTI on or after the date on which either the purchaser or seller has ceased to comply with any of the requirements above
  • the sales for which the purchaser can issue an RCTI are agreed to in writing by the purchaser and the seller either in a separate written agreement specifying the supplies to which each agreement relates or embedding this information or specific terms in the tax invoices they issue.

What is included in the written agreement between the seller and the purchaser?

The written agreement between the seller and purchaser must meet all of the following requirements – it must:

  • be current and effective whenever an RCTI is issued
  • list the type of goods or services that it relates to
  • state that the purchaser can issue tax invoices for the supplies
  • state that the seller will not issue tax invoices for the supplies
  • state that both the seller and the purchaser are registered for GST at the time they enter into the agreement and, if either ceases to be registered for GST, they will notify each other.

Example: A cane grower supplies cane to a sugar mill, which in turn supplies testing services to the grower. Although the supplies are related they must still be treated as separate supplies, which must be accounted for separately in the parties’ GST returns. The recipient created tax invoice issued by the mill can, however, act as a tax invoice covering both supplies provided it treats them as separate.

Our dedicated team can assist you with all your accounting and GST related matters. Complete and submit the Express Enquiry form on the top right hand side of this page and we will contact you to discuss your enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.

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The Quinn Group operates Quinn Consultants, Quinn Lawyers, Quinn Financial Planning and Quinn Financial Solutions. The Quinn Group provides related information in regard to legal, accounting and financial planning issues. Liability limited by a scheme approved under Professional Standards Legislation* *other than for the acts or omissions of financial services licensees.