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Leveraging the new taxable supply information requirements

Tax Alert - April 2023

By  Haidee Watkin

Leveraging the new taxable supply information requirements

For years Inland Revenue policed tax invoice requirements that had been established as far back as 1985, but now, the tax invoice requirements have undergone significant modernisation. The rigid requirements to be a “tax invoice” are being replaced by the more flexible “taxable supply information”. This change presents both challenges and opportunities for organisations, as they adjust their systems and processes to the new GST landscape. While the initial transition may pose some challenges, it also provides a chance to streamline interactions with suppliers and customers and optimise accounts payable and accounts receivable processes.

Key changes at a glance:

  • The words “tax invoice” are no longer required
  • Data does not need to be set out in a single document, it can be held in systems or multiple documents
  • The threshold for reduced information requirements has increased from $50 to $200

The new taxable supply information requirements should reduce the cost of GST compliance. The increase in the low-value threshold from $50 to $200 will reduce the amount of detailed compliance testing. Gone are the days of chasing valid tax invoices for transactions that are slightly over $50, particularly for credit card reconciliations and employee reimbursements. Only basic information (name of supplier, date of invoice, consideration and description of goods/services supplied), which often can be found in existing documentation, such as credit card statements and expense reconciliation systems is required.

The shift to ‘Taxable Supply Information’ enables finance staff to shift their focus from invoice testing to ensuring the relevant information is collected and maintained during customer and supplier setups, reducing the number of compliance tests required on invoices at processing time. For example, if the supplier name and GST number is collected during a supplier setup when invoices are later processed, only the date, a description of goods and tax particulars will need to be checked by the accounts payable team.

In most circumstances, taxable supply information is only required to be issued for taxable supplies in excess of $200 and the recipient of the supply has requested the taxable supply information. There are some exceptions to this including listed services and what were formally known as ‘buyer created tax invoices’ (discussed in the questions below).

The new taxable supply information requirements provide more flexibility and allow organisations to streamline GST compliance.


Commonly asked questions on the changes

Taxable supply information (tax invoices) is the minimum set of information the suppliers and customers are required to keep as evidence of a transaction to support a GST return. Unlike its predecessor, the tax invoice, the requirement to hold all information in one document has been removed and organisations can hold this information in a variety of sources. For more information on taxable supply information, see our previous Tax Alert article.

For supplies over $200, organisations are generally required to issue taxable supply information within 28 days of a request or at a time agreed upon by both parties, unless the service provided is a listed services (such as Uber) then taxable supply information is required to be issued at the time of supply.

Yes, you are required to provide buyer-created taxable supply information, irrespective of whether it was requested. In addition to this, both supplier and customer are required to maintain copies of the buyer-created taxable supply information.

No, the requirement to state tax invoice in a prominent place on invoicing documentation has been removed. Likewise, you don’t need to say ‘credit note’ or ‘debit note’ if you are adjusting a previous invoice. However, in practice, we recommend in this transitional phase that maintaining the traditional wording on documents will assist in expediting invoices while the new approach is embedded by accounts payable teams. In particular, continuing to include the words ‘tax invoice’ will ensure that your invoice is not rejected by a system which has not caught up with the new rules.

“Supply correction information” replaces both debit notes and credit notes. Supply correction information corrects previously issued taxable supply information. Information requirements are below:

If the organisation has previously issued taxable supply information in which particulars or the tax amount is incorrect, the organisation is required to issue supply correction information.

If your organisation is currently compliant with the old tax invoicing requirements, then you will generally be compliant with the new taxable supply information requirements. However, your suppliers may start to issue taxable supply information which you will need to ensure your system/accounts payable staff can deal with.

Strictly speaking, no invoice is required for supplies of under $200. For such supplies, a credit card statement and a description in the expense claim system could suffice all the requirements. At a minimum to you to hold details of the supplier name, the date, a description of the goods and services and the amount. However, we recommend caution, as an input tax deduction should only be claimed to the extent the supply has been provided by a GST-registered person and the underlying supply is a taxable supply. If there is a reasonable level of doubt, then seeking further information would be prudent. For example, gift cards and Uber should be assessed on a case-by-case basis.

The invoicing requirements for reverse charges have been updated to align with the new taxable supply information requirements. However, there are some additional disclosure requirements for salary and wage components. We would recommend discussing these additional requirements with your advisor.

Information requirements for second-hand goods credits differ from that of taxable supply information. An organisation is required to hold the following information for a supply greater than $200 and that they wish to claim an input tax deduction in relation to:

  • Name and address of the supplier; and
  • The date on which the second-hand goods were supplied; and
  • A description of the second-hand goods; and
  • The quantity or volume of the second-hand goods; and
  • The consideration for the supply.

This is only a snapshot of the taxable supply information changes and some common questions that we have been asked. Navigating these new requirements can often be difficult and complex. Now is a good time to get in touch with Deloitte about our interactive workshops to assist with dealing with these changes. For more information contact your usual Deloitte advisor.

April 2023 - Tax Alerts

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