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Recipient Created Tax Invoice

Tax invoices are crucial for Australian businesses, documenting sales and allowing for Goods and Services Tax (GST) claims. Typically, suppliers issue these invoices. However, in specific situations, the purchaser can create the invoice, known as a Recipient-Created Tax Invoice (RCTI).

Take control of your payments and use a recipient-created tax invoice to pay your supplier proactively, rather than waiting for them to issue an invoice.

What is an RCTI?

An RCTI is a tax invoice issued by the buyer of goods or services, rather than the seller. This is permissible in certain circumstances approved by the Australian Taxation Office (ATO), typically for practical or commercial reasons. Common examples include government grants and trade-in contracts.

When Can You Issue an RCTI?

You can issue an RCTI if:

  • Both you and the supplier are registered for GST.
  • You have a written agreement with the supplier stating that you will issue RCTIs and they will not issue tax invoices for these transactions.
  • The agreement is current and valid when you issue the RCTI.
  • The goods or services involved are of a type that the ATO has approved for RCTI invoicing.

Creating a Recipient-Created Tax Invoice

Creating an RCTI is similar to creating a standard tax invoice. The key difference is that it must be clearly labelled as a recipient-created tax invoice. If youโ€™re unsure how to create a valid tax invoice, resources are available to guide you through the process.

The Australian Taxation Office (ATO) provides a template to help you create a Recipient-Created Tax Invoice (RCTI).