GST INVOICE REQUIREMENTS UPDATE

Under current rules a GST registered entity is required to hold a valid tax invoice before being able to claim GST on a transaction in a GST Return. From 1 April 2023 the requirement to have all relevant information on the one document is being relaxed.
For most business’s, their current systems will continue to meet IRD requirements.

The GST terminology is being updated. New terms coming into effect are:

• Taxable supply information (TSI) will replace Tax Invoices;
• Supply correction information (SCI) will replace Credit/Debit Notes;
• Buyer-created taxable supply information will replace Buyer-created tax invoices.

In order to claim GST on a transaction it will be a requirement to hold the relevant “Taxable Supply Information”. This is the minimum set of information buyers and sellers need to keep as evidence of a transaction.

Supplies over $1,000 – TSI required will include the name and registration number of the supplier, recipient details, address of a physical location for the recipient (if available), date of the supply, a description of the goods or service and details of the GST charged. This is similar to the current requirements for a “Tax Invoice’, however from 1 April 2023 the information will not be required to be stated in the one document – the required information is just required to be held somewhere to support any GST claim.

Supplies over $200 and less than $1,000 – TSI required includes details of the goods or services supplied and a statement that the amount of consideration includes tax charged for the supply, or a statement of the amount of tax charged. In most cases the record of the sale will contain the relevant taxable supply information.

Supplies up to $200 – TSI will include any record of the transaction including record of sale, invoices, supplier agreements and bank statements.
The definition of taxable supplies has not changed.

Supply correction information (SCI) – where details, or information, relating to the supply has changed a credit or debit note is now optional. Supplying the relevant updated information will be sufficient. This will be useful in circumstances where the supply is cancelled, goods are returned or not delivered, or where incorrect information was originally provided – e.g. description of the goods or services, buyer or seller details, dates or GST calculations.

Supplier Groups, GST Groups and shared Tax invoices
The new rules allow 2 or more registered persons to form supplier groups so they can issue 'shared tax invoices' for GST purposes.

Members of supplier groups enter into an agreement stating 1 member of the group will issue tax invoices, credit notes and debit notes on behalf of the other members.

The member responsible for issuing tax invoices, credit notes and debit notes is called the issuing member. Supplier groups are not the same as GST groups.

Changes to Buyer- Created tax invoices
The change in buyer-created tax invoices (now known as buyer-created taxable supply information), means the removal of the requirement to obtain Inland Revenue approval to issue these documents. An agreement, in writing, between the parties is required to confirm that - (i) the supplier will not issue taxable supply information for the relevant taxable supplies and - (ii) that the recipient will issue taxable supply information for each taxable supply by the supplier to the recipient.