What is an acceptable Tax Invoice and Why do I need one?

It is a legal requirement to keep records relating to the operation of your business. You need legitimate source documents to prove that a transaction was related to the running of your business.

In other words, if you don’t have a receipt for it, you can’t prove the transaction was for business purposes or claim the GST credit on it.

Tax Invoices in particular must include certain information in order to meet ATO requirements. They are required to claim the GST credits on purchases of more than $82.50.

If you don’t have a Tax invoice, you need to request one from your supplier (who are required to provide you with one within 28 days upon request). If you do not have a valid Tax Invoice, you CANNOT claim the GST portion of the transaction (as you can’t prove that the transaction included GST).

Depending on the price of the sale, the details on a Tax Invoice may differ, for example, Tax invoices for more than $1,000 require more information than those under $1,000.

This affects all businesses; the requirement is not trade or industry specific.

Accepted Tax Invoice

This is a Tax invoice that has been issued to Joe Frost of Frosty’s Air Conditioning for his purchase of an Airconditioning Unit from ABC Sales Pty Ltd

  1. The document MUST state that it is a Tax Invoice
  2. The Supplier’s details must be shown, including their ABN.
  3. The Purchaser’s details must also be listed, including their ABN.
  4. The date of the sale needs to be displayed.
  5. A detailed description of the goods being purchased is required, any serial numbers and quantities should be listed to further identify the products along with quanties, unit prices and a subtotal.
  6. A Tax Invoice MUST identify the GST component of the sale, here it is added to the subtotal of the invoice before a final total amount is entered.