Despite significant technological and operational business changes, the rules regarding GST tax invoices have remained largely unchanged since GST was first introduced in 1986. However, new legislation was passed on 29 March 2022 that is intended to improve and modernise GST invoicing and record-keeping requirements.
A long-standing requirement to be able to make a GST deduction on a standard taxable supply is that a “tax invoice” must be held at the time a GST return is filed. This requirement is being repealed. Instead, the concept of “taxable supply information” (‘’TSI’’) has been introduced and is required instead. For supplies that exceed $1,000, TSI comprises:
- the name and registration number of the supplier,
- recipient details,
- address of the recipient,
- date on which the taxable supply information is issued,
- a description of the goods of services supplied, and
- the consideration for the supply and details of the GST amount charged.
Meanwhile, the ‘form’ of credit and debit notes are being replaced by “supply correction information” (SCI), which is deemed to have a larger scope. The issue of a SCI is required within 28 days of the TSI being issued, or by a date agreed between the supplier and the recipient.
Record keeping requirements have been simplified as businesses are only required to keep a record of the TSI and SCI for all taxable supplies made and received. Supplies valued less than $200, will not require TSI to be issued, but in order to claim GST a
TSI must be requested from the supplier. For supplies under $200, TSI must include, name, GST registration number of the supplier, date of supply, description and amount of consideration for the supply.
The changes bring in an element of confusion, because other than the reference to ‘taxable supply information’ it is difficult to determine the practical effect of the changes. But because the process of ‘invoicing’ is so fundamental, additional time has been given to allow businesses to work through implementation of the changes, hence they apply to taxable periods beginning on or after 1 April 2023.
One change that was introduced with immediate effect is that Inland Revenue approval will no longer be required to issue buyer created tax invoices. Instead, the parties simply need to agree that the recipient will issue the invoices (or TSI from 1 April 2023) and record their reasons for doing so if it is not part of their normal terms of business. This is a positive change that is welcomed, but whether the broader changes above are also positive remains to be seen.