Know what to include on a tax invoice

Posted 16 Oct '20

Know what to include on a tax invoice

By Brooke Guiton

A detailed overview of invoicing requirements.

Invoicing is a critical element to the success of your business, as it has a direct impact on your cash flow. Knowing why you need to invoice and ensuring your invoices include all necessary information assists your customers to pay you promptly for the goods or services you have provided. In addition, keeping a record of transactions – both in relation to invoices you have issued and payment of supplier invoices received – will assist you to meet your own tax obligations. To assist you in preparing the correct type of invoice and ensuring an invoice issued or received is valid, please note the following:

What is the difference between an ‘invoice’ and a ‘tax invoice’?

An ‘invoice’ is provided by a business who has an ABN but is not registered for GST.  A ‘tax invoice’ includes reference to GST by entities registered for GST.

Details to be included on a tax invoice for taxable sales of less than $1,000

A tax invoice for amounts less than $1,000 must include the following:

1. Notation that the document is a ‘tax invoice’
2. Your (ie. the seller’s) name/identity
3. Your business’ ABN
4. The date the invoice was issued
5. A brief description of the items sold, including the quantity (if applicable) and price
6. The GST amount payable – this can be shown separately; or if the GST is exactly one-eleventh of the total price, the total can be stated as ‘Total price includes GST’
7. The extent to which each sale on the invoice is a taxable supply. Where the tax invoice includes both taxable and non-taxable supplies (ie. GST-free or input-taxed supplies), the invoice must show each taxable supply, the amount of GST, plus the total amount to be paid.

Format of tax invoices for sale of $1,000 or more

Where a taxable sale is for $1,000 or more, the additional requirement is the inclusion of the purchaser’s identity or ABN.

Examples of the format of tax invoices can be found at https://www.ato.gov.au/business/gst/tax-invoices/.

How can I confirm an ABN is valid?

ABN Lookup is a publicly available listing of Australian Business Numbers (ABNs) on the Australian Business Register (ABR). This can be accessed on the website https://abr.business.gov.au/. ABN Lookup is a tool provided to assist businesses in confirming the validity of the ABN provided on supplier’s invoices. 

If the ABN quoted on an invoice provided does not match the supplier’s details and appears to be invalid, businesses are required to withhold from the payment at the top tax rate.

ABN Lookup provides the details of an entity’s registered trading name, where it differs to the entity name and confirms whether the entity is registered for GST.

If you have any questions in relation to this information, please don’t hesitate to contact a WDF Professional team member.