Invoices vs Tax Invoices

Confused over the difference between an invoice and a tax invoice? You’re not on your own, so let’s see if we can lay some of that confusion to rest.

Tax Invoices (for GST registered clients)

A tax invoice is an invoice which, to comply with ATO rules and regulations, must contain certain information including:

• Your business or trading name and ABN

• The date the invoice was issued

• A brief list of the items sold, along with the price and quantity

• The amount of GST (if applicable) relevant to each item supplied

• The buyer’s business or trading name, or their ABN for sales of $1,000 (including GST) or more

• That the invoice is obviously intended to be a tax invoice

While there is no legal requirement to actually use the words ‘Tax Invoice’, to ensure you comply with that last dot point (above), best practice is that tax invoices sent out to your GST registered clients should include the words ‘Tax Invoice’ (preferably at the top of the document), even if the service or items purchased are entirely free of GST or are exempt – in which case, the GST amount shown on the invoice would be zero.

Invoices (for clients not registered for GST)

For customers who are not registered for GST, only use the word ‘Invoice’ on the document you send out for payment. However, for any supplies valued at over $1,000, you must also include the customer’s ABN or identity on the invoice, in addition to you own identity and ABN.