Recipient Created Tax Invoice

When the receiver of goods or services creates a Tax Invoice

Normally the supplier of goods or services has an obligation to prepare and issue a tax invoice to the customer (“recipient”).

However there are occasions which are provided for in the GST rules when the recipient is permitted to create a valid tax invoice. Such an invoice is called the Recipient Created Tax Invoice (“RTCI”).

Tax office approval of RCTI

Essentially an RCTI can only be issued in circumstances which have Tax Office approval. The circumstances are typically those in which for commercial or practical reasons it is appropriate for the recipient of a supply to calculate and/or issue an invoice. Government grants and trade-in contracts are typical RTCI examples.

Tax Ruling GSTR 2000/10 provides situations where sales can be invoiced using RCTIs.

They include:

• certain supplies of agricultural products
• supplies made to registered Government related entities
• supplies to registered recipients with turnover of at least $20 million
• a specific situation for research grants

The Tax Office can be requested to determine other situations where RCTIs can be used – see contact details from the ATO link below.

See Legislative Instrument LI 2023/20 Requirements for the issue of an RCTI and Explanatory Statement.

RCTI Requirements

Requirements include

• the purchaser and the seller are both registered for GST
• there is a current written sales agreement, or terms are embedded in the invoice (see the ATO-sourced template below, for example)
• copy issued and maintained for 5 years

Further information  

• Recipient Created Tax Invoices – ATO
• GSTR 2000/10 – Goods and services tax: recipient created tax invoices
• ATO – free invoice template – Nat 73657 – Find this template at https://www.ato.gov.au/Forms/Recipient-created-tax-invoices/

This page was last modified 2023-06-19