Tax Invoice Legalites

[Scott No Mates]

I've recently dealt with a matter where my client was the one that wasn't providing tax invoices for the supply of new residential premises (taxable supply, no margin scheme). In this case the contract was silent regarding issue of a tax invoice before payment. Interestingly, not one buyer out of more than 75 settlements requested a tax invoice.

Unless the purchaser was registered for GST, there is no expectation that a Tax Invoice would be issued for the purchase of residential property as residential property is input taxed ie the vendor would have been obliged to remit 1/11 of the sale price to the ATO.

 

[JDM]

Unless the purchaser was registered for GST, there is no expectation that a Tax Invoice would be issued for the purchase of residential property as residential property is input taxed ie the vendor would have been obliged to remit 1/11 of the sale price to the ATO.

I understand that, however out of 75 there is usually a few that are registered and request a tax invoice (especially the sale of the management rights). Solicitors often ask as a matter of course where it is a taxable supply as well regardless of the Buyer's ability to claim an input tax credit or GST treatment of their on-sale.

 

[Paul@PFI]

Interesting view and I agree that, practically speaking, you should require a tax invoice before or at the time of payment. I always draft contracts on this basis. Do you form the same view if the supplier has already quoted their ABN?

I've recently dealt with a matter where my client was the one that wasn't providing tax invoices for the supply of new residential premises (taxable supply, no margin scheme). In this case the contract was silent regarding issue of a tax invoice before payment. Interestingly, not one buyer out of more than 75 settlements requested a tax invoice.

And none would even need one. Resi premises are input taxed meaning the GST cannot be claimed. If the MS was used the GST cant be claimed either. There are very few instances where acquisition of resi premises gives rise to gst and an eligible tax credit. Very rare.