Definition
A recipient-created tax invoice (RCTI) is a tax invoice issued by the buyer of goods or services instead of the supplier, used in Australia under GST rules. Both parties must be registered for GST and have a written agreement. The buyer issues the RCTI, and the supplier does not issue its own tax invoice for the same supply.
Also called: RCTI, Recipient created tax invoice, Buyer-created tax invoice
Recipient-created tax invoice in practice
RCTIs suit arrangements where the buyer is better placed to work out the value of the supply, such as freight, primary production, and contractor work billed from the buyer's own job records. The ATO sets the conditions for using them.
The document must clearly show it is a recipient-created tax invoice, include the usual tax invoice details and both parties' ABNs, and reach the supplier within 28 days of the sale or of the buyer working out its value. The written agreement must state that the supplier will not issue tax invoices for the same supplies and that each party will tell the other if it stops being registered for GST.
If you are a supplier under an RCTI agreement, check each RCTI carefully. You are still responsible for the GST on the sale, and your BAS should match the RCTIs you received. New Zealand has a similar arrangement for buyer-created taxable supply information.
Example
An owner-driver hauls freight for a logistics company. At month end the company issues an RCTI for $11,000 including $1,000 GST, based on its job records, and pays it. The driver uses the RCTI as the sales record for his BAS.
Frequently Asked Questions
Is an RCTI the same as self-billing?
Yes, in substance. The UK and EU call the same arrangement self-billing. Australia uses the term recipient-created tax invoice, and the GST rules set specific conditions.
Can a supplier also send its own invoice under an RCTI agreement?
No. The supplier must not issue a tax invoice for supplies covered by the RCTI agreement, otherwise GST could be claimed twice.
Related terms
- Self-billing invoice A self-billing invoice is an invoice prepared by the buyer on the supplier's behalf, based on what the buyer received, rather than by the supplier.
- Tax invoice A tax invoice is an invoice that meets the legal requirements for the buyer to claim a tax credit, typically under a VAT or GST system.
- GST GST (goods and services tax) is a broad consumption tax applied to most goods and services, functioning like VAT.
- ABN An ABN, or Australian Business Number, is an 11-digit number that identifies a business to the Australian government and other businesses.
- BAS A BAS (Business Activity Statement) is the form Australian businesses registered for GST lodge with the Australian Taxation Office to report and pay GST, PAYG withholding, PAYG instalments, and other taxes.
This page is for general information only and is not legal, tax, or financial advice. Rules change and vary by location, so consult a qualified lawyer or accountant about your situation.