GST invoice rules are changing
Dealing with GST invoices will be much simpler under Inland Revenue’s (IRD) new rules which come into force from 1 April 2023. The changes provide more flexibility. If your invoicing practices are compliant with the current rules then they will continue to comply with the new rules. However, all businesses will need to be aware of the changes to ensure their business processes can manage the new GST requirements.
The biggest change is you’ll no longer have to issue and hold a “tax invoice” document. Instead, tax invoices will be replaced by a more general requirement to provide and keep certain records known as taxable supply information (TSI). This is a set list of information that must be provided to any GST-registered customers within 28 days of the date of supply. Information over and above current tax invoice requirements includes:
- The ”date of the supply” — when the time of supply is triggered, rather than the current tax invoice requirement of the date on which the tax invoice is issued.
- For supplies over $1,000, the TSI must include the recipient's physical address (if that information is available).
- For supplies over $200, the changes mean it is mandatory to issue TSI to GST-registered customers within 28 days of the date of supply, and for supplies made to non-GST registered persons you have 28 days from when the customer requests the information.
Previously, you needed to keep a tax invoice to claim GST on any supplies costing more than $50 (including GST). From 1 April, this threshold will rise to $200 (including GST). You must still keep records to support your expense claims, including a tax invoice if you receive one. However, if you do not receive a tax invoice, you can keep other records that are sufficient on their own, or in combination, to support your expense claims. For example: invoices, supplier agreements, contracts, and bank statements.
The IRD has also removed the requirement for buyer-created tax invoices to be approved by IRD. These will be replaced by written agreements between parties to confirm self-billing.
From 1 April, you can continue to issue tax invoices, or you can provide the taxable supply information (TSI) in any format you choose. Examples could be a list of information in an email, electronic invoice, or information supplied via an e-invoicing system. You don’t need to use the words “taxable supply information” or include these words in the information you provide as part of the TSI.
Similarly, to claim GST on a payment you make to your supplier, what is required from the supplier would simply be a list of information, rather than a document called “tax invoice”.
If you're unsure about the changes or need more information on the taxable supply information, let us know - we're happy to help.
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