Farewell to “tax invoices’’

Despite significant technological and operational business changes, the rules regarding GST tax invoices have remained largely unchanged since GST was first introduced in 1986. However, new legislation was passed on 29 March 2022 that is intended to improve and modernise GST invoicing and record-keeping requirements.

A long-standing requirement to enable you to make a GST deduction on a standard taxable supply is that a “tax invoice” must be held at the time a GST return is filed. This requirement is being repealed. Instead, the concept of “taxable supply information” (‘TSI’) has been introduced and is now required.

For supplies that exceed $1,000, TSI comprises:

-the name and registration number of the supplier;

- recipient details;

- address of the recipient;

- date on which the taxable supply information is issued;

- a description of the goods or services supplied; and

- the consideration for the supply, and details of the GST amount charged.

Meanwhile, the form of credit and debit notes is being replaced by “supply correction information” (SCI). which is deemed to have a larger scope. The issue of a SCI is required within 28 days of the TSI being issued, or by a date agreed between the supplier and the recipient.

The changes bring in an element of confusion because, other than the reference to ‘taxable supply information’, it is difficult to determine the practical effect of the changes. However, because the process of ‘invoicing’ is so fundamental, additional time has been given to allow businesses to work through implementation of the changes. This means that the changes will only apply to taxable periods beginning on or after 1 April 2023.

If you have any questions on how this affects you or what you need to do, please get in touch with us.