Sales Invoices are required to contain specific information to be considered a valid tax invoice by the Australian Taxation Office. Failure to comply could mean that 46.5% tax is deducted from the payment to you and instead remitted to the ATO.
When you make a taxable sale of more than $82.50 (including GST), your GST-registered customers need a tax invoice to claim a credit for the GST in the purchase price. Note this rule is about claiming GST. If a business wants to claim a tax deduction for an expense they need to have evidence, ie a receipt, invoice, photo, dairy notes. If a customer asks you for a tax invoice you must provide one within 28 days of their request. A tax invoice doesn’t need to be issued in paper form, it can be by an electronic format or e-invoice.
Here are six things you need to have tax compliant invoicing
- That the document is intended to be a tax invoice
- Clearly display your identity as the seller – full business name and address is recommended
- Your ABN (Australian Business Number) must be on the document
- The date the invoice was issued
- The description of the product purchased by your customer, quantity and of course the price.
- Display the GST separately and then the total value of what is sold (including GST) – Called a GST Exclusive Invoice or Total price of the sale (including GST) with the wording “Total price including GST” – Called a GST inclusive invoice
- the extent to which each sale on the invoice is a taxable sale
If you have sales over $1000 on your tax invoice you are also required to add your customer’s identity or ABN.
Here is an example of a tax invoice from the ATO Website:
For more information on Sales (tax) Invoices – here