What is a Tax invoice?

What must appear on a tax invoice

For a taxable sale of less than $1,000 including GST, a tax invoice must show:

• The words tax invoice, stated prominently
• The seller’s identity and ABN
• The date the invoice was issued
• A description of the items sold, including quantity and price
• The GST amount — either shown separately, or a statement that the total price includes GST
• The extent to which each sale is a taxable sale

For sales of $1,000 or more including GST, the invoice must also show the buyer’s identity or ABN.

When you need one to claim GST

To claim a GST credit on a business purchase you generally need to hold a valid tax invoice from the supplier. There is one practical exception: for purchases of $82.50 including GST or less, no tax invoice is required.

You still need a record showing what the purchase was and that it was for the business — a docket, a receipt or a line in a petty cash book. That threshold is exactly why petty cash is worth logging properly rather than reconstructing at year end.

No ABN on the invoice

If a supplier does not quote an ABN on their invoice, the no-ABN withholding rules may require you to withhold from the payment. That is a real obligation rather than a formality, and it applies to business-to-business payments.

Suppliers who are not registered for GST cannot issue a tax invoice at all — they issue a regular invoice with no GST on it, and there is no GST credit for you to claim.

Keeping tax invoices

Business records, including the tax invoices supporting your GST credits, must generally be kept for at least five years. They must be in English and explain the transaction well enough that someone else could follow it.

Thermal receipts fade well inside five years, so scanning them as they arrive is worth the time. A GST credit claimed with no surviving substantiation is a credit at risk.

Key takeaways

• A tax invoice needs the words “tax invoice”, the seller’s ABN, the date, what was sold and the GST amount
• At $1,000 or more including GST, the buyer’s identity or ABN is also required
• No tax invoice is needed to claim GST on purchases of $82.50 including GST or less
• A supplier not registered for GST cannot issue a tax invoice
• Keep them for at least five years

Our free invoice generator produces a compliant Australian tax invoice with your ABN and GST in under a minute, and the general ledger template codes the GST at one eleventh when you record it.