Re: Managed Payments and Creating a Buyer's Tax In...

waddingtonfirstaid · ‎20-08-2020

Our Tax Invoices come with an ABN - that of a company - Pty Ltd and include GST. However, whether or not eBay takes, records or pays GST is not really relevant because we should only be focused on the amount we finally get paid for our sale, everything else in the eBay equation has to cancel out within our accounting of their take because we never actually receive it. I'd be happy to see how this may alter if it is actionable differently.

Please remember, the amount eBay actually sends you is your only income from a sale. Therefore, you can only off-set your own expenses, cost of the item etc... against the income you recieve for the sale to your banking account.

As far as Tax Invoicing and GST is concerned, the Australian Government provides the following summary at https://www.business.gov.au/finance/payments-and-invoicing/invoicing-and-payments-explained :

Invoicing

An invoice is a record of purchase that allows your customers to pay you for the goods or services that you’ve provided. It gives your customers details of their purchase, including the:

type of product or service provided
quantity
price agreed to

There are different types of invoice. Make sure you know which one to use. Proper invoicing helps you to protect your business’ cash flow, maintain good records and meet your tax obligations.

Regular invoices

If you run a business that is not registered for goods and services tax (GST), your invoices won’t include a tax component. These are called regular invoices. They should not include the words 'tax invoice'.

Tax invoices

If you’re registered for GST, you must provide tax invoices. Tax invoices include the GST amount for each item along with some extra details. You need to provide a tax invoice if any of these apply:

The purchase is taxable.
The purchase is more than $82.50 (including GST).
Your customer asks for a tax invoice.

If your customer asks for a tax invoice and you’re not registered for GST, show on your invoice that there is no GST. You can do this by including the statement ‘price does not include GST’ or showing the GST as nil or zero.

Recipient created tax invoices

In special cases, the buyer can provide you with the tax invoice. These are called recipient created tax invoices (RCTIs).

Go to the ATO website to learn more about RCTIs (https://www.ato.gov.au/Business/GST/In-detail/Your-industry/Scrap-metal/GST-and-scrap-metal--code-of... ), including when and how you can use them.

Example of when to use a RCTI

RCTIs can be used if you sell a farming product and the buyer determines its value.

For example, sugar cane mills test crushed sugar cane for its sugar content. They decide how much to pay the seller based on the sugar content.

Once the mill knows the value of the sugar cane, it provides the seller with a recipient created tax invoice.