e are all familiar with claims for supplies that are
taxes, but up until this worth $50 or more, but no more
very moment you probably than $1,000, require you to have
were unaware that such a thing as a tax invoice in order to get a
a tax invoice existed. credit. Without a tax invoice you
cannot claim a credit when your
A tax invoice is a legal document return is due if you do not have
that lists the goods and services a tax invoice. However, there is
tax (GST) in any given a loophole available if you find
transaction. If you are a yourself in this position. To
business owner, it is important take advantage of it all that is
to know that you have obligations required is that you still obtain
when it comes to the many the GST for the transaction, and
different tax invoices in then claim the credit for the
existence. purchase in a later return. In
this case, a simplified tax
In order to claim a GST credit invoice is acceptable, but the
for supplies totaling more than tax invoice must clearly show the
$50, you must have a tax invoice. words ‘tax invoice’ in a
When you supply goods or services prominent place, the name and GST
to a registered business or number of the supplier, the date
individual, you must be able to that it was issued, a description
provide a tax invoice within 28 of the goods or services that
days if the registered business were supplied, and the total
or person requests one. Failure amount that is payable, as well
to provide a tax invoice when as a statement that the GST is
requested can result in included.
penalties.
For supplies or services less
If you are a business owner, than $50, no tax invoice is
needed. However, it is important or service, the GST content and
you still keep a record of such the total amount paid for the
items as invoices, vouchers or supply. If you don’t have this
receipts for these purchases. information, then the invoice
Though a problem is most likely must include a statement to the
to never arise, you should try effect that the GST was included
and keep a minimum amount of in the final price. It should
documentation just to be safe. also be noted that if the tax
Nobody likes the idea of an IRS invoice covers multiple supplies
audit, especially when you can’t or services totaling $1,000 or
provide requested documentation. more, then all the details listed
above are required for each
When dealing with supplies worth supply or service.
$1,000 or more, the process of
claiming a credit is a little The helpful descriptions provided
more involved. The tax invoice here can be the difference
must clearly display the between an IRS audit and a
following: the words ‘tax thriving business. This is
invoice’; the GST number; the especially true for many small
name, or trade name; the name and business owners who may not have
address of the recipient; the all of the resources most of the
date it was issued; the quantity big corporations have at their
of the goods or services disposal. In a society where the
supplied; and a description of tax code grows more and more
the goods or services. convoluted each year, it is in
the best interests of small
The invoice should also include businesses to have a firm grasp
the amount (excluding the tax) of these rules and procedures.
that was charged for the supply
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Max Plata
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