Business owners are required to keep records of all sales and purchases in order to prepare your activity statements. To claim GST credits, you must have specific GST records called tax invoices that record your purchase of goods or services and comply with the GST law. Additionally, you are also required to provide a receipt (or tax invoice) for goods and services that you provide. You need to retain these invoices for five years.
You must have a tax invoice to claim a credit for the GST included in the price of any goods and services you buy for your business that cost more than $82.50 (including GST).
If you sell goods and services that include GST and a customer asks you for a tax invoice, for sales of more than $82.50 (including GST) you have to give them one within 28 days after the request.
In most cases, the business selling the goods or services issues the tax invoice. In some special cases, a tax invoice may be issued by the business buying the goods and services – this is called a recipient created tax invoice.
Information to include on tax invoices
Any tax invoices you issue to your customers or receive from your suppliers must contain certain information in order to be valid tax invoices. The information required to be shown on tax invoices varies according to whether the tax invoice is for an amount less than $1,000, or for $1,000 or more.
For less than $1,000:
- the words ‘tax invoice’ stated prominently
- the name of the supplier
- the ABN of the supplier
- the date of issue of the tax invoice
- a brief description of the goods or services sold
- the total price of the sales (including GST).
Where the GST to be paid is:
- exactly one-eleventh of the total price, show the GST amount separately or provide a statement such as ‘total price includes GST’,or
- less than one-eleventh of the total price, show the GST amount and the total amount excluding GST for the sales.
For more than $1,000:
- the words ‘tax invoice’ stated prominently
- the name of the supplier
- the ABN of the supplier
- the name of the recipient
- the address or ABN of the recipient
- the date of issue of the tax invoice
- the quantity of the goods or the extent of the services sold
- a brief description of the things sold
- the total price of the sale (including GST).
Where the GST to be paid is:
- exactly one-eleventh of the total price, show the GST amount separately or provide a statement such as ‘total price includes GST’
- less than one-eleventh of the total price, show the GST amount and the total amount excluding GST for the sales.
For advice or more information on invoicing, bookkeeping or any business accounting requirements contact the accountants at The Quinn Group now by submitting an online enquiry form or call 1300 QUINNS or on +61 2 9223 9166.
For advice on how to prepare tax invoices, or any other accounting or tax related advice contact The Quinn Group on 02 9223 9166.
