Once you become registered for GST, your invoices must be tax invoices. They include the GST component of the transaction and allow your GST registered customers to claim GST credits on their purchases (as they need to keep a copy of a tax invoice for any purchase of $82.50 or over. To remove any confusion for businesses who have just registered for GST for the first time we have created this guide outlining all that you need to do with tax invoices.
Requirements for tax invoices
There are a few regulations surrounding tax invoices that you will be required to follow. Additional requirements are added depending on whether the sale is over $1,000, or if your customer requires a tax invoice.
If your customer asks for a tax invoice, you will have 28 days to provide one. The tax invoice, if it is for a sale of less than $1,000, must show the following information:
- That it is a tax invoice
- Your name or business name
- Your Australian business number (ABN)
- The date you issued the invoice
- What the item was that you sold, the quantity and the price
- The amount of GST paid. You can either display it as a value or as a statement saying: “total price includes GST”
- The extent at which each sale includes GST
If the sale is over $1000 you need to ensure that the buyer’s identity or ABN is clearly displayed on the invoice. You can issue invoices that meet the requirements of sales over $1,000 for any sale.
For invoices that include both taxable and non-taxable items you simply need to show which items are taxed. You could do this by having a GST column next to each item’s price, writing the GST added onto the price of the taxable items, or adding an asterisk next to prices that have a GST component (supermarket receipts are a great example of this). You should then include at the end of your invoice the total GST paid like you would on a normal tax invoice.
Tax invoices are important as they are your obligation as a GST registered business, but are also important to your clients and customers planning to claim GST credits. When you register for GST you should make sure you are prepared to issue tax invoices.
If you need further help you can ask GST Register. We offer comprehensive advice for those wanting to register for GST and for those who already have. Give us a call today!