An Australian Tax Invoice is a legally required document that a GST-registered supplier must provide to a recipient for any taxable supply where the GST-inclusive price is AUD $82.50 or more. It is the primary document by which the recipient can claim an input tax credit (ITC) on their Business Activity Statement (BAS). Without a valid tax invoice, the ATO may disallow the recipient's input tax credit claim — making it essential that the invoice contains all the required information.

The legal framework for tax invoices is the A New Tax System (Goods and Services Tax) Act 1999 (Cth). Section 29-70 of the GST Act sets out what a tax invoice must contain. The ATO has also issued Goods and Services Tax Ruling GSTR 2013/1 (Tax invoices), which provides detailed guidance on the requirements and on circumstances where the ATO will accept documents that are not strictly compliant.

A tax invoice is distinct from a standard invoice or a proforma invoice. A standard invoice requests payment but may or may not comply with the GST Act's requirements. A proforma invoice is an estimate or quotation — it is not a tax invoice and cannot be used to claim an ITC. Only a document that meets all the requirements of the GST Act, issued by a GST-registered supplier, qualifies as a tax invoice.

For supplies of AUD $1,000 or more (GST-inclusive), the ATO requires a full tax invoice including the recipient's name or ABN. For supplies under $1,000, a simplified tax invoice may be used, which can omit the recipient's details. For supplies under $82.50 (GST-inclusive), no tax invoice is required, though the supplier must still account for GST on their BAS.

A tax invoice must be issued every time a GST-registered Australian business makes a taxable supply of AUD $82.50 or more (GST-inclusive). Common situations include:

Supplying goods or services to another business: The recipient needs the tax invoice to claim their ITC. This is the most common situation — B2B supply of goods, services, or mixed supplies.

Supplying goods or services to a consumer: While consumers cannot claim ITCs, providing a tax invoice is still required under the GST Act when requested and is good business practice for consumer record-keeping.

Progresss claims in construction: Under the Building and Construction Industry Security of Payment legislation in each Australian state and territory, payment claims must be accompanied by a valid tax invoice to trigger the statutory payment regime.

Subcontractor invoices: Where a contractor engages a subcontractor, the subcontractor must issue a valid tax invoice for each payment claim. Failure to provide a proper tax invoice can delay payment and create ATO compliance issues for both parties.

Recurring or subscription supplies: Businesses providing recurring services should issue a tax invoice for each billing period, clearly stating the period covered, the supply description, and the GST breakdown.

A valid Australian tax invoice for a supply of AUD $1,000 or more (GST-inclusive) must include the following elements, as required by the A New Tax System (Goods and Services Tax) Act 1999 (Cth) and GSTR 2013/1.

The words 'Tax Invoice': The document must be clearly labelled 'Tax Invoice'. A document headed simply 'Invoice' or 'Receipt' does not qualify unless it meets all other requirements and the context makes clear it is a tax invoice.

Supplier's identity: The supplier's full legal name or trading name, and the supplier's ABN. The ABN is the most critical field — without it, the document is not a valid tax invoice and the recipient cannot claim an ITC.

Date of issue: The date the tax invoice is issued. For determining the correct BAS period, the date of issue determines when the GST is attributable.

Description of the supply: Sufficient detail to identify what was supplied. For goods, include the type, quantity, and unit price. For services, include the nature of the services and the period covered. Vague descriptions such as 'professional services' without further detail may not satisfy the ATO's requirements.

GST-exclusive price and GST amount: The price before GST, the GST amount (10%), and the GST-inclusive total. Alternatively, the invoice may state that the total amount is GST-inclusive and that the GST component is 1/11th of the total. Both formats are accepted.

Recipient's identity (for supplies of $1,000 or more): The recipient's name or ABN. For supplies under $1,000, this can be omitted (simplified tax invoice).

Payment terms and bank details: While not a GST Act requirement, including payment terms (due date) and bank details (BSB and account number) is essential for prompt payment and is standard commercial practice in Australia.

Late payment interest: If you intend to charge interest on overdue invoices, the rate and conditions must be stated on the invoice or in the underlying contract. The ATO's General Interest Charge rate (announced quarterly) is a commonly used benchmark.