What Is a Recipient Created Tax Invoice?

Last Updated on Wed, 03 Feb 2010 11:41

A recipient created tax invoice (RCTI) is a tax invoice that is issued by the recipient of the goods and/or services rather than the supplier. RCTIs can only be issued by a recipient if:

  • the recipient and the supplier are both registered for GST
  • the sales for which the recipient can issue a RCTI are agreed to in writing by the recipient and the supplier either in a separate written agreement specifying the supplies to which each agreement relates or embedding this information or specific terms, as outlined in the Legislative Instrument, in the tax invoices they issue
  • the agreement is current and effective when the RCTI is issued
  • the goods or services being sold under the agreement are of the type that we have determined can be invoiced using RCTIs.

The ATO have made legislative determinations about the types of sales of goods or services that can be invoiced using RCTIs. For more information, phone on 13 28 66 or visit the legal database at law.ato.gov.au and search using the term ‘RCTI’.

What is a valid RCTI?

To be valid, a RCTI must contain:

  • the words ‘recipient created tax invoice’ stated prominently
  • the name of the supplier
  • the ABN of the supplier
  • the name of the recipient
  • the 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).

If the RCTI is for taxable sales only, it must also:

  • provide a statement such as ‘total price includes GST’
  • show the total price and a statement to the effect that the GST shown is payable by the supplier.

If the RCTI is for both a taxable sale and either a GST-free or input taxed sale, it must also:

  • clearly identify each taxable sale
  • show the total price
  • show the total amount of GST payable separately and a statement to the effect that the GST shown is payable by the supplier.

The recipient must:

  • issue the original or a copy of the RCTI to the supplier within 28 days of when the sale is made or when the value of the sale is determined
  • retain the original or a copy of the RCTI
  • reasonably comply with its obligations under the taxation laws
  • not issue a document that would otherwise be an RCTI, on or after the date when they or the supplier has failed to comply with any of the requirements of RCTIs.

For more information about recipient created tax invoices, refer to Goods and Services Tax Ruling GSTR 2000/10 Recipient created tax invoices.