ATO tax invoice requirements, in plain English

When you must issue one

A tax invoice is the document a GST-registered seller gives a customer for a taxable sale. The ATO says that if a customer asks for one, you must provide it within 28 days, unless the sale is for A$82.50 (including GST) or less. What it has to include depends on the sale amount, the sale type (for example, a sale with both taxable and non-taxable items) and who issues it.

To see how this looks in an invoicing app, read Invoicing for sole traders.

Sales under A$1,000

A tax invoice for a taxable sale of less than A$1,000 must include enough information to clearly determine these seven details:

1. the document is intended to be a tax invoice
2. the seller's identity
3. the seller's Australian business number (ABN)
4. the date the invoice was issued
5. a brief description of the items sold, including the quantity (if applicable) and the price
6. the GST amount (if any) payable. It can be shown separately or, if the GST is exactly one-eleventh of the total price, as a statement that says “Total price includes GST”
7. the extent to which each sale on the invoice is a taxable sale

Sales of A$1,000 or more

Tax invoices for sales of A$1,000 or more must also show the buyer's identity or ABN. The ATO notes that if your invoices meet the requirements for sales of A$1,000 or more, you can use them for smaller sales too. One template that meets the larger-sale rule therefore works for every sale.

Taxable and non-taxable items

If one invoice has taxable and non-taxable items, it must clearly show which items are taxable. Items are non-taxable if they are GST-free or input-taxed. The invoice must also show each taxable sale, the amount of GST to be paid and the total amount to be paid.

Digital invoices

A tax invoice doesn't need to be on paper. The ATO gives emailing an invoice as a PDF as an example. Whatever you send must contain all the required information to be a valid tax invoice.

Rounding GST

When GST includes a fraction of a cent, special rounding rules apply. With one taxable sale on the invoice, round the GST to the nearest cent, rounding 0.5 cents upwards. With more than one taxable sale there are two methods, the total invoice rule and the taxable supply rule, and the ATO page sets out both. You and your customers don't need to use the same one.

When to register for GST

You must register for GST:

• when your GST turnover (gross business income minus GST) is A$75,000 or more, which the ATO calls the GST threshold
• when you start a business and expect turnover to reach the threshold in the first year
• when you provide taxi or limousine travel for passengers, including ride-sourcing, whatever your turnover
• if you want to claim fuel tax credits

Once you are required to register you have 21 days to do it. Otherwise registering is optional, and if you choose to, you generally must stay registered for at least 12 months. You need an ABN first. Your GST turnover is your total business income, not your profit, minus GST and a few exclusions the ATO lists, such as input-taxed sales and sales not connected with Australia. Check it each month against the current month plus the previous 11, and your projected turnover for the current month plus the next 11.

This guide is general information from the ATO pages above, not tax advice. For your own situation, check the ATO pages or ask a registered tax or BAS agent.