I, Deborah Jenkins, Acting Deputy Commissioner of Taxation, make this determination under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Deborah Jenkins

Acting Deputy Commissioner of Taxation

Dated: 17/09/2016

Name of determination

1.      This determination is the Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 36) 2016 for Recyclers.

Commencement

2.      This determination commences on the day after registration.

Repeal of previous determination

3.    A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 4) 2000 (the previous determination) - F2006B00728, registered on 22 May 2006, is repealed on commencement of this determination.

Determination (Which entities are covered under this determination)

4.      This determination applies to a recycler that is the recipient of a taxable supply of second-hand goods and that satisfies the requirements of this determination.

5.      A recipient that satisfied the requirements of the previous determination will satisfy the requirements of this determination.

Class of tax invoices that may be issued by a recipient of a taxable supply under this determination

6.      A recycler that is the recipient of a taxable supply of second-hand goods may issue a tax invoice called a recipient created tax invoice (RCTI) for the taxable supply if the recycler:

(a)  establishes the value of those goods after the supply is made using a       qualitative or quantitative process; and

(b)  satisfies the requirements set out in Clause 7.

Requirements that must be satisfied by a recipient under this determination

7.   A recipient must satisfy the following requirements when issuing an RCTI under this determination:

(a)  be registered for GST;

(b)  set out the ABN of the supplier on the RCTI;

(c)   issue the original or a copy of the RCTI to the supplier within 28 days of making, or determining, the value of the taxable supply and retain the original or the copy;

(d)  issue the original or a copy of an adjustment note to the supplier within 28 days of any adjustment and must retain the original or the copy;

(e)  reasonably comply with its obligations under the taxation laws; and

(f)   have either a written agreement with the supplier that meets the requirements of Clause 8, or a written agreement with the supplier embedded in the RCTI it issues that meets the requirements of Clause 9.

Requirements of a written agreement with the supplier

8.    The written agreement the recipient has with the supplier must:

(a)  specify the supplies to which it relates;

(b)  be current and effective when the RCTI is issued; and

(c)  have the following conditions:

(i)    the recipient can issue RCTIs in respect of the supplies;

(ii)    the supplier will not issue tax invoices in respect of the supplies;

(iii)   the supplier acknowledges that it is registered for GST when it enters into the agreement and that it will notify the recipient if it ceases to be registered for GST; and

(iv)  the recipient acknowledges that it is registered for GST when it enters into the agreement and that it will notify the supplier if it ceases to be registered for GST.

Requirements of an agreement embedded in an RCTI

9.    The embedded agreement in the RCTI that the recipient issues to the supplier must contain the following statement:

The recipient and the supplier declare that this agreement applies to supplies to which this tax invoice relates. The recipient can issue tax invoices in respect of these supplies. The supplier will not issue tax invoices in respect of these supplies. The supplier acknowledges that it is registered for GST and that it will notify the recipient if it ceases to be registered. The recipient acknowledges that it is registered for GST and that it will notify the supplier if it ceases to be registered for GST. Acceptance of this RCTI constitutes acceptance of the terms of this written agreement.

Both parties to this supply agree that they are parties to an RCTI agreement. The supplier must notify the recipient within 21 days of receiving this document if the supplier does not wish to accept the proposed agreement.

 Definitions

10.   The following expression is defined for the purposes of this determination:

recycler means an entity that principally acquires second-hand goods for reworking into usable form.  This includes goods such as paper, metal, glass and plastics.

11.   Other expressions in this determination have the same meaning as in the GST Act.