Recipient-created tax invoices (made by a client; but in the viewpoint of a supplier)

Recipient-created tax invoices

In most cases, tax invoices are issued by the supplier. However, in special cases, you, as the purchaser or recipient of the goods or services, may issue a tax invoice for your purchases (that can be strange huh, you as recipient of the services issue a tax invoice or a bill)(Big clients of your company can use this method as their way of dealing with you for GST related purposes). This is known as a recipient-created tax invoice (RCTI).


When you can issue an RCTI


You can issue an RCTI if:

• you and the supplier are both registered for GST
• you and the supplier agree in writing that you may issue an RCTI and they will not issue a tax invoice
• the agreement is current and effective when you issue the RCTI
• the goods or services being sold under the agreement are of the type that we have determined can be invoiced using an RCTI.

Your written agreement can either be a separate document in which you specify the supplies, or you can embed this information or specific terms in the tax invoice itself.


When an RCTI is valid


To be valid, an RCTI must contain sufficient information to clearly determine the standard requirements (except that it needs to show the document is intended to be a recipient-created tax invoice, not a standard tax invoice).


In addition it must detail the purchaser's identity or ABN.


It must also show that, if GST is payable, it is payable by the supplier.


As the recipient, you must:

• issue the original or a copy of your RCTI to the supplier within 28 days of one of the following dates

1. the date of the sale
2. the date the value of the sale is determined (As a supplier of services, we expect to receive RCTI from the client within that date)

• retain the original or a copy of the RCTI
• reasonably comply with your obligations under the tax laws.

You must not issue a document that would otherwise be a RCTI on or after you or the supplier have failed to comply with any of the requirements of RCTIs.


See also:


Ref: https://www.ato.gov.au/Business/GST/Issuing-tax-invoices/