How to check a tax invoice has what the ATO needs

Short answer

1. Look for the words Tax Invoice, the seller’s name and the seller’s ABN.
2. Look for the issue date, the items, the quantity and the price.
3. Look for the GST amount, or the line Total price includes GST.
4. At $1,000 or more, look for your name or ABN as the buyer.
5. Over $82.50, hold a valid one before you claim the GST credit.

Before you start

Have the invoice open as a PDF or photo. Know your own business name and ABN. If the invoice mixes taxable lines with GST-free ones, such as international freight, expect to check line by line.

All the rules below come from the ATO page Tax invoices. The invoice rule for GST credits comes from When you can claim a GST credit.

The manual way

The ATO says a tax invoice for a taxable sale under $1,000 must include enough information to clearly work out these seven details.

1. The document is intended to be a tax invoice.
2. The seller’s identity.
3. The seller’s ABN.
4. The date the invoice was issued.
5. A brief description of the items sold, with the quantity if it applies and the price.
6. The GST amount, shown separately or as the statement Total price includes GST when the GST is exactly one-eleventh of the total.
7. The extent to which each sale on the invoice is taxable.

For a sale of $1,000 or more, the invoice must also show the buyer’s identity or ABN. The ATO adds that an invoice that meets the $1,000 rule can be used for smaller amounts too.

Other rules to keep in mind:

• When you need one. You must hold a tax invoice to claim a GST credit on a purchase that costs more than $82.50 including GST. Your supplier has 28 days to give you one after you ask. Wait for it before you claim, even if that lands in a later period.
• Mixed invoices. An invoice with taxable and non-taxable items must clearly show which items are taxable. It must also show the GST payable and the total.
• Digital is fine. A tax invoice can be a PDF or other digital file if it holds all the required details.
• eInvoices. An eInvoice sent under the A-NZ Peppol specification counts as intended to be a tax invoice even without the words Tax Invoice.
• Rounding. With one taxable sale, round GST to the nearest cent. With several, the ATO sets a total invoice rule and a taxable sale rule.
• Buyer-created invoices. A recipient-created tax invoice needs a written agreement with the supplier and both ABNs.

In Xero and MYOB there is no field that checks these seven details. You read each invoice yourself, then enter it. What you key in, the supplier, date, lines and tax rate, is only as good as the invoice you read.

The Pulsify way

Pulsify does not score an invoice against the full ATO list. It does run these checks on every invoice:

1. It reads the supplier, ABN, invoice number, date, lines and GST per line.
2. It checks the ABN against the Australian Business Register and flags an invalid ABN. It also flags an ABN that is not registered for GST when the invoice charges GST.
3. It flags a missing invoice number or date, and totals that do not add up.
4. It flags an invoice addressed to a customer that does not match your profile.
5. You fix the flagged field or ask the supplier for a corrected invoice, then approve.

Pulsify flags. It does not block you from approving anything but a bill that Xero or MYOB would refuse.

Worked example

Example Plumbing Supplies sends an invoice for $1,320.00. It shows the words Tax Invoice, its ABN, today’s date and three lines. The footer says Total price includes GST. No customer name or ABN appears anywhere.

The sale is over $1,000, so the buyer’s identity or ABN must be there. The invoice fails the ATO rule. Ask Example Plumbing Supplies for a corrected copy. If they take more than 28 days, the ATO says you can seek permission to treat a document as a valid tax invoice.

Common mistakes

• Claiming the GST credit before the valid tax invoice arrives.
• Treating a statement, quote or delivery docket as a tax invoice.
• Assuming a small invoice never needs one. Over $82.50, it does.

Next step

Try an invoice at app.pulsify.tech/sign-up. Or book a call to find out how customers have saved hours per week after switching.

Read the invoice checks guide. Free tools: the tax invoice template for your own sales and the construction invoice compliance checker.