ATO tax invoice requirements: the checklist, and checking one you've received
If you're registered for GST, a supplier's tax invoice is what lets you claim the GST back. Below is what the ATO says one has to show, set out as a checklist you can hold an invoice against, and what to do when one you've received falls short, while the supplier is still keen to fix it.
In short
- Under $1,000, a tax invoice must make seven details clear: that it's a tax invoice, the seller's identity and ABN, the date, each item with its quantity and price, the GST, and how much of each sale is taxable.(ATO: Tax invoices)
- From $1,000 it must also show the buyer's identity or ABN, and you need a tax invoice to claim the GST credit on a purchase over $82.50.(ATO: Tax invoices; ATO: When you can claim a GST credit)
- Check one you've received before you pay: a supplier fixes a paperwork slip quickly while the invoice is unpaid.
The short answer
For a sale under $1,000, the ATO says a tax invoice must include enough information to clearly work out seven details:(ATO: Tax invoices)
- that the document is intended to be a tax invoice (the words "tax invoice" are the usual way)
- the seller's identity
- the seller's ABN
- the date it was issued
- a brief description of each item sold, including the quantity (where there is one) and the price
- the GST payable, shown as an amount, or, where the GST is exactly one eleventh of the total price, a statement such as "Total price includes GST"
- the extent to which each sale on the invoice is taxable
The checklist, by invoice size
A tax invoice for a sale of $1,000 or more has to show everything above and the buyer's identity or ABN as well. The table sets the eight details side by side with what to look for on an invoice a supplier has sent you.(ATO: Tax invoices)
| Detail | Under $1,000 | $1,000 or more | What to look for on a supplier's invoice |
|---|---|---|---|
| Intended to be a tax invoice | Under $1,000: Yes | $1,000 or more: Yes | What to look for on a supplier's invoice: The words "tax invoice", usually at the top. A quote, a statement or a docket isn't one. |
| Seller's identity | Under $1,000: Yes | $1,000 or more: Yes | What to look for on a supplier's invoice: A business name that matches the ABN's entity name or one of its business names on ABN Lookup. |
| Seller's ABN | Under $1,000: Yes | $1,000 or more: Yes | What to look for on a supplier's invoice: Eleven digits, printed. Look it up once for every new supplier. |
| Date issued | Under $1,000: Yes | $1,000 or more: Yes | What to look for on a supplier's invoice: The invoice date, not only the delivery date. |
| Items, quantities and prices | Under $1,000: Yes | $1,000 or more: Yes | What to look for on a supplier's invoice: Enough to match each line to your order or delivery docket. |
| GST payable | Under $1,000: Yes | $1,000 or more: Yes | What to look for on a supplier's invoice: The GST as an amount, or "Total price includes GST" where it's exactly one eleventh of the total. |
| How much of each sale is taxable | Under $1,000: Yes | $1,000 or more: Yes | What to look for on a supplier's invoice: GST-free items marked as such when some lines carry no GST. |
| Buyer's identity or ABN | Under $1,000: No | $1,000 or more: Yes | What to look for on a supplier's invoice: Your business name or ABN. |
The $82.50 threshold and the 28-day rule
You need a tax invoice to claim a GST credit on a purchase that costs more than $82.50 including GST. For $82.50 or less, a tax invoice, a cash register docket, a receipt or an invoice will do, and if you have none of those, the ATO says to keep a record of the purchase.(ATO: When you can claim a GST credit)
If you ask a GST-registered supplier for a tax invoice, they have 28 days to give you one, unless the sale is $82.50 or less including GST.(ATO: Tax invoices)
The ATO's advice is to wait until you have the tax invoice before you claim the credit, even if that means claiming it in a later period. GST credits have a four-year time limit.(ATO: When you can claim a GST credit)
Tax invoice, invoice, receipt, statement or docket?
The documents a supplier sends look alike, and only one of them lets you claim the GST on a larger purchase. business.gov.au puts the first split plainly: GST-registered businesses use tax invoices, which show the GST, and businesses that aren't registered use invoices that don't show any tax.(business.gov.au: How to invoice)
- Tax invoice: from a GST-registered supplier, showing the GST and everything in the checklist. The one you need for a purchase over $82.50.(ATO: Tax invoices; ATO: When you can claim a GST credit)
- Invoice without GST: from a supplier that isn't registered for GST. There's no GST on it to claim, and ABN Lookup will show the ABN isn't registered for GST.(business.gov.au: How to invoice)
- Receipt: shows you've paid. For a small purchase it can back a GST claim; for a larger one it isn't a substitute for the tax invoice.
- Statement: a list of the invoices and payments on your account over a period, asking you to pay what's outstanding. It isn't a tax invoice for the purchases on it, so match it to the invoices themselves.
- Delivery docket: the record of what arrived, signed on site. It's what you check an invoice's quantities against, not a document to pay from.
- Quote: a price offered for a job or an order. It's what the invoice should be checked against, once accepted.
- Recipient-created tax invoice (RCTI): a tax invoice the buyer issues instead of the supplier, allowed only in the cases covered below.(ATO: Tax invoices)
Checking a tax invoice you've received
The checklist is written for the business issuing the invoice. On the receiving end, the same rules turn into a few questions to ask before you pay and claim the GST:
- Is it a tax invoice at all, or a quote, a statement or a docket sent in its place?
- Is the ABN printed, active, and registered for GST on the invoice date? The ATO suggests checking a supplier's GST registration on ABN Lookup when you claim credits.(ATO: When you can claim a GST credit; ABR: ABN Lookup)
- Is the GST right? At the standard rate it's one eleventh of a GST-inclusive price, or ten per cent of a price before GST, and there should be none on an item you agreed is GST-free.
GST = price including GST ÷ 11GST = price before GST × 10% - Does each line give the item, the quantity and the price, so you can hold it against what you ordered and what arrived?
- For $1,000 or more, does it name your business or show your ABN?(ATO: Tax invoices)
- Does the maths hold: each quantity times its price, the lines to the subtotal, and the subtotal plus GST to the total? On a scan, re-read the figures before you conclude the supplier is wrong.
When something is missing or wrong
An invoice with incorrect or incomplete information isn't a valid tax invoice. The ATO says you may be able to treat it as one if the missing details can be found on other documents the supplier has given you; otherwise, ask the supplier to replace it with a complete and correct tax invoice.(ATO: When you can claim a GST credit)
If the supplier doesn't respond within 28 days of your request and you can't find the missing information elsewhere, you can ask the ATO for permission to treat a document as a valid tax invoice. The ATO's page says how to ask.(ATO: When you can claim a GST credit)
Ask before you pay if you can. A supplier fixes a paperwork slip quickly while an invoice is unpaid, and much more slowly once the money has gone.
What goes wrong on construction invoices
Most problems are ordinary paperwork slips rather than anything deliberate. The ones worth looking for before you pay:
- GST charged but no ABN printed anywhere on the invoice.
- GST charged by a business that isn't registered for GST. ABN Lookup shows whether, and since when, an ABN is registered for GST.(ABR: ABN Lookup)
- A larger invoice ($1,000 or more) with no buyer name or ABN on it.(ATO: Tax invoices)
- A statement, quote or delivery docket paid as if it were the invoice. None of those is a tax invoice unless it has everything above.
- GST that is more than ten per cent of the price it is charged on, usually a keying slip on a GST line or a rounding step.
- GST on an item that should carry none, on an invoice mixing GST-free and taxable lines without saying which is which.
Invoices you write yourself: RCTIs
Some head contractors pay subcontractors on recipient-created tax invoices (RCTIs) instead of waiting for the subcontractor's own. The ATO allows it only when both of you are registered for GST, you've agreed in writing that you'll issue them and the supplier won't, the agreement is current, and the kind of supply is one the Commissioner has determined can be invoiced that way. An RCTI must show it's a recipient-created tax invoice and carry both ABNs, and you give the supplier the original or a copy within 28 days of the sale, or of the date you work out its value.(ATO: Tax invoices; ATO: Recipient-created tax invoices)
If you issue RCTIs, read the ATO's pages on them rather than relying on a summary: the written agreement has to say certain things.(ATO: Recipient-created tax invoices)
PDFs and eInvoices
A tax invoice doesn't have to be on paper: a PDF sent by email is fine, as long as it carries everything required. Some eInvoices sent over the Peppol network don't carry the words "tax invoice", and the ATO accepts that they meet the requirement when they follow the Australian and New Zealand Peppol invoice specification and hold all the mandatory data.(ATO: Tax invoices)
Checking one quickly
CostCode's free invoice check reads one invoice and checks the maths, that an ABN is printed where GST is charged, and that the GST isn't more than ten per cent. It needs no account and doesn't keep the file. It doesn't look the supplier up on ABN Lookup, which takes a minute to do yourself.
With a free CostCode account, the same checks run on every invoice you upload: a tax invoice with no ABN printed, or GST over ten per cent, is held with the evidence, and so is GST on an item your price list says is GST-free. Nothing goes to the supplier unless someone in your team sends it.
Questions
Do I need a tax invoice for a small purchase?
To claim a GST credit you need a tax invoice for purchases over $82.50 including GST. For $82.50 or less, a receipt, a cash register docket or an invoice will do.(ATO: When you can claim a GST credit)
Does a tax invoice have to say "tax invoice"?
It has to be clear that the document is intended to be a tax invoice. Printing the words "tax invoice" is the usual way to do that, and business.gov.au lists them among what to include.(ATO: Tax invoices; business.gov.au: How to invoice)
When does the invoice need my details on it?
For sales of $1,000 or more, the tax invoice also has to show the buyer's identity or ABN.(ATO: Tax invoices)
How long does a supplier have to send a tax invoice?
28 days from when you ask, unless the sale is $82.50 or less including GST.(ATO: Tax invoices)
Can I claim the GST if the tax invoice is missing something?
Not on an invoice that isn't valid, unless the missing details are on other documents the supplier gave you. Ask for a corrected tax invoice and wait for it before you claim; if the supplier doesn't respond within 28 days, you can ask the ATO for permission to treat a document as a tax invoice.(ATO: When you can claim a GST credit)
Is a supplier statement a tax invoice?
No. A statement lists the invoices and payments on your account. Claim the GST from the tax invoices themselves, and match the statement to them.