GST invoicing changes from 1 April 2023

Important note:

The GST changes outlined below were enacted on 30 March 2022 with a delayed implementation date of 1 April 2023.  They are subject to the remedial GST changes included in the Taxation (Annual Rates for the 2022-23, Platform Economy, and Remedial Matters) Bill (No2), which was released on the 8 September 2022 (see here).  The remedial GST changes have not yet been enacted, but we do expect them to be close to their final form.  Our comments below have taken into account the remedial GST changes.

The new GST invoicing rules were enacted in March 2022 with effect from 1 April 2023.  In September 2022, a number of remedial GST changes have been introduced to further amend these rules.  The new rules are intended to replace the current tax invoicing rules with a new framework governing information requirements. 

Most GST registered businesses should be able to continue issuing their tax invoices and GST credit notes without making any changes to their systems.  The new rules would allow a wider range of invoicing practices to be adopted (e.g., e-invoicing systems). 

Even if you are not required to make any changes, you should still be aware of these additional options as your suppliers’ invoicing practices may be changing, which could impact the way you operate your business.  

Brief summary of new terminologies

First, you need to get familiar with the new terminologies.  Three new important concepts have been introduced under the new rules: 

• “Taxable Supply Information” / TSI will replace tax invoices

• “Supply Correction Information” / SCI will replace credit notes or debit notes.

• “Supply Information” refers to the list of information required in certain situations when the supply is not subject to GST. 

What do you need to do for tax invoices after 1 April 2023?

• Instead of issuing a document called “tax invoice”, you could explore one of several options.  You could provide a list of information (called taxable supply information or TSI), in a format chosen by you.   Alternatively, you could continue to issue tax invoices.  You are not required to use the words “taxable supply information” in any document, 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”.  
• There is no mandatory requirement in terms of the format in which the GST information must be provided.   This could be a list of information in an email, or an electronic invoice, or simply an exchange of data with your customer or supplier via an e-invoicing system.
• As the requirement to issue “tax invoices” is replaced by a new requirement to provide GST information, you need to check whether your existing tax invoices include the correct GST information (see sections below under “TSI” and “SCI”).  You don’t need to issue TSI if the customer is not registered for GST or the amount charged is under $200 (including GST).
• In the event your supplier’s tax invoice / TSI omits any required information (e.g., their GST registration number), they can choose to provide you with the missing information in any format they choose (e.g., in an email), instead of issuing a new tax invoice.
• The required GST information does not need to be provided in the same document (such as the tax invoice), or at the same time.  Any information received from your suppliers can form part of the TSI (see sections below under “TSI” and SCI”).  You need either the TSI or SCI in order to claim GST. 

What do you need to do for credit notes / debit notes after 1 April 2023?

• In most cases, you should be able to continue issuing debit notes or credit notes under the new rules.  However, you need to ensure that the credit note / debit note includes the required GST information (see sections below under SCI).
• Instead of issuing a document called “credit note” or “debit note”, as required under the current rules, you could simply provide the required information to the customer in a format chosen by you.
• You don’t need to issue SCI if the error in the TSI has no GST impact.
• You may be required to make changes to your credit note / debit note templates to include information identifying the TSI (i.e., the tax invoices to which the credit or debit note relate).  The best practice is to include the original invoice number.  If this is not practicable, you may consider including other information which can be used to identify the original tax invoice or TSI.  See further comments under the SCI section.

For GST groups  

• If you have a GST group, the GST group member can continue to issue tax invoices or provide TSI under their own name and registration number.  Alternatively, the tax invoices or TSI can be provided under the name and registration number of the GST group representative.  The tax invoices / TSI can also be issued under another entity’s name, who is not the GST representative, or the member making the supply, but certain notification to the IRD may be required.

Buyer Created Tax Invoices   (“BCTI”)

• You are not required to obtain IRD’s approval if you wish to issue BCTIs.  Instead you need to make sure correct contractual documentation is in place allowing you to issue BCTI.  BCTI is still required to be kept to support your input tax claims.

Please note the comments above are for ordinary transactions subject to GST.  Different rules may apply to imported goods or services, or acquisitions from non-GST registered person.  There could be other practical implications as a result of the new GST invoicing rules being implemented.  Please contact our KPMG GST specialist team if you need further guidance.

TSI is essentially a list of information you need to provide to your GST registered customers.  They will need to keep the TSI you issue to claim GST.  Most of the required GST information should already be included in your tax invoice.  TSI is required to be issued within 28 days of a request being received for a TSI.

The table below compares the required content of a tax invoice to the information required for TSI.  

SCI is essentially a list of information you are required to provide to a GST registered customer to correct an error in the TSI.  You can use SCI to correct many errors, such as an incorrect description of the supply, an incorrect amount charged, or an incorrect GST rate and a cancellation of the supply.  There is no specific time requirement to issue SCI, but you will need to issue and keep SCI to support any GST claims on the SCI. 

The table below compares the required content of a debit note or credit note to the information required for SCI.