PaperternAU Australia

Recipient created tax invoices (RCTI) explained

A recipient created tax invoice (RCTI) is a tax invoice written by the buyer instead of the seller. The Australian Taxation Office (ATO) says it applies "in special cases". This page sets out the conditions in the ATO's words and in the law's words, with links and a checked date. It cannot tell you whether a particular business meets them.

What a recipient created tax invoice is

In most sales, the supplier writes the tax invoice. The ATO says that in special cases the purchaser "may issue a tax invoice for your purchases". That document is an RCTI.

The supplier does not write its own tax invoice for the same sale. Both sides agree to this in writing, either in a separate agreement or in an agreement printed on the RCTI.

Who may issue an RCTI

The law names two kinds of buyer. They are in section 6 of the Recipient Created Tax Invoice Determination 2023 (LI 2023/20). The ATO's own page does not list them.

Kind 1: government related entities and large business entities

Section 6(1) says such a buyer "may issue an RCTI for the supply if" two things are true:

  • the buyer and the supplier "are registered for GST when the RCTI is issued"; and
  • the buyer satisfies the requirements in section 7 (see "Timing and records" below).

Section 4 defines "large business entity". It starts with a business that "meets the large business entity turnover condition" and adds GST group and joint venture cases.

Kind 2: any business entity that sets the value of what it buys

Section 6(2) adds a third condition to the two above: "the recipient determines the value of the taxable supply acquired from the supplier".

The ATO lists its own conditions in plain words. It says an RCTI can be issued if:

  • "you and the supplier are both registered for GST at the time the RCTI is issued";
  • "you and the supplier agree in writing that you may issue an RCTI and they will not issue a tax invoice";
  • "the agreement is current and effective when you issue the RCTI"; and
  • "the Commissioner has determined that the type of goods or services sold under the agreement can be invoiced using an RCTI."

The ATO's fourth condition says the Commissioner has determined the type of goods or services. The ATO points to the Recipient Created Tax Invoice Determination 2023 for what that covers. We quote both texts as written.

Whether a business meets these conditions is a question for a tax agent or the ATO.

The written agreement

Both sides need a written agreement. The ATO says it can be "a separate document specifying the sales", or it can be embedded in the tax invoice. Section 7(1)(d) of the determination requires one or the other.

A separate agreement must, under section 8, do four things:

  • specify the taxable supplies it covers;
  • be current when an RCTI is issued;
  • contain acknowledgments from both sides that each is registered for GST; and
  • include conditions that the buyer can issue RCTIs, the supplier will not issue tax invoices, and each side will tell the other if it stops being registered for GST.

An agreement printed on the RCTI must follow section 9. It must declare that:

  • (a) it applies to supplies to which the RCTI relates;
  • (b) the recipient will issue RCTIs in respect of the supplies;
  • (c) the supplier will not issue tax invoices in respect of the supplies;
  • (d) the supplier and the recipient are registered for GST and will notify the other party if they cease to be registered for GST;
  • (e) the supplier will notify the recipient within 21 days of receiving the RCTI if the supplier does not accept the proposed written agreement; and
  • (f) acceptance of the RCTI constitutes acceptance of the terms of the written agreement, and both parties to the supply agree that they are parties to an RCTI agreement.

These are the determination's words, not ours. The ATO also publishes form NAT 73657 to help with RCTI agreements: see ATO: recipient-created tax invoices.

What the document must show

The ATO says the RCTI must "show the document is intended to be a recipient-created tax invoice, not a standard tax invoice". It must also show both Australian Business Numbers (ABNs): the ATO says "the suppliers and purchaser's ABN". If GST is payable, it must show that the supplier pays it.

The ATO adds that the document must contain enough information to meet the tax invoice requirements. Our guide to what a tax invoice must show in Australia lists those fields.

Neither the ATO page nor the determination prescribes exact words for the heading. The words "Recipient created tax invoice" are a label that shows the document's purpose. They are not words the law requires.

Timing and records

Section 7(1) lists what the buyer must do. Three items matter most for dates:

  • Issue the RCTI "either as an original or a copy" to the supplier within 28 days of the supply. If the buyer sets the value after the supply, the 28 days run from when the value is determined.
  • "retain the original RCTI or a copy of it for five years".
  • Stop issuing documents that would otherwise be RCTIs once either side fails a requirement of the determination.

For an embedded agreement, section 7(1)(e) adds that the buyer must "have not received notice from a supplier within 21 days of issuing an RCTI". The notice is one saying the supplier does not accept the proposed agreement.

Example. A buyer receives goods on 3 November 2026. The price is set on 10 November 2026, after the supply. The 28 days run from 10 November, so the last day to issue the RCTI is 8 December 2026. If the buyer issues it on 10 November with an embedded agreement, the 21-day notice window ends on 1 December 2026. Invented dates, for illustration only.

RCTI or ordinary tax invoice?

A tax invoice is normally written by the seller. An RCTI is written by the buyer under a written agreement. The seller then does not issue its own tax invoice for that sale.

For what a normal tax invoice must show, see what a tax invoice must show in Australia. For a seller's tax invoice, the tax invoice maker for GST-registered businesses makes one as a PDF.

If you are the supplier and you receive one

If you are the supplier and you receive one, the sources say these things:

  • The agreement must declare that the supplier will not issue tax invoices for the supplies. Section 9(c) and section 8(d)(ii) both say so.
  • The supplier must be registered for GST when the RCTI is issued.
  • With an embedded agreement, the supplier has 21 days to tell the buyer it does not accept the agreement. Section 9(e) says the supplier "will notify the recipient within 21 days of receiving the RCTI".
  • The ATO expects the buyer to "check that the supplier is GST-registered before issuing your first RCTI to them".

What a supplier should do about a particular RCTI is a question for a tax agent or the ATO.

Sources

Our method is on How we check the rules.

Questions

What does recipient created tax invoice mean?

It means a tax invoice written by the buyer instead of the supplier. The ATO says this happens "in special cases". The supplier does not issue its own tax invoice for that sale.

Who may issue a recipient created tax invoice?

Section 6 of the 2023 determination names two kinds of buyer: government related entities and large business entities, and any business entity that sets the value of what it buys. Both sides must be registered for GST when the RCTI is issued.

What is the difference between an RCTI and a tax invoice?

The buyer writes an RCTI under a written agreement with the supplier. The supplier writes a normal tax invoice. The ATO says an RCTI must show it is intended to be a recipient-created tax invoice, not a standard one.

What must a recipient created tax invoice show?

The ATO says it must contain enough information to meet the tax invoice requirements. It must show that it is an RCTI and show both ABNs. If GST is payable, it must show that the supplier pays it.

What is a recipient created tax invoice agreement?

It is the written agreement that lets the buyer issue RCTIs. It can be a separate document under section 8, or it can be printed on the RCTI under section 9.

About this page: written by Papertern from the official sources linked on this page, and checked against them. Rules checked 31 October 2026.

General information only, not tax, legal or accounting advice. We check the rules against official sources, but rules change and errors or omissions can happen: check the official source before you rely on it. An RCTI is only valid if the conditions above are met; check with your tax agent or the ATO.