An estimated 1.2 billion invoices are exchanged annually in Australia. Standard invoices and tax invoices are the most commonly used invoices, and which type you issue affects your goods and services tax (GST) obligations, customer’s ability to claim input tax credits, and exposure if the Australian Taxation Office (ATO) conducts an audit. Using the wrong type of invoice could mean delayed payments, rejected credit claims, and errors on your business activity statement (BAS).

Below, we’ll cover the main invoice types used in Australia, how they interact with your tax obligations, and what happens when businesses get the distinctions wrong.

Highlights

• Australia has two main invoice types—standard and tax—and each serves its purpose in the payment and compliance lifecycle.

• Using the wrong invoice type can invalidate a customer’s GST credit claim or leave a discrepancy between your BAS figures and liabilities.

• Your GST registration status determines which invoice type applies in any given transaction.

What are the common types of invoice used in Australia?

Australian businesses primarily work with two invoice types. A standard invoice is a payment request for goods or services where GST doesn’t apply because the supplier isn’t registered for GST. A tax invoice is issued by GST-registered businesses and entitles GST-registered buyers to claim an input tax credit.

You might also encounter a proforma invoice, a preliminary document that looks like an invoice but isn’t a demand for payment, nor a tax invoice. Businesses use them to confirm a price before a sale is finalized or to facilitate customs clearance when goods ship before the final payment clears. Because it’s not a tax invoice, buyers can’t use it to claim input tax credits.

An adjustment note is required to reduce the amount of GST that was previously charged, and is used when goods are returned, an overcharge needs correcting, or a discount is applied after the original invoice was sent.

In Australia, the legal and tax framework around invoices is shaped primarily by the A New Tax System (Goods and Services Tax) Act 1999 and the ATO’s associated rulings.

When should Australian businesses use each invoice type?

The right invoice type depends on the nature of the transaction, your GST registration status, and where your customer is located.

Here’s when each type is applicable:

• Standard invoice: Use this when you’re not registered for GST or the supply is input-taxed (e.g.; residential rent or financial supplies). Businesses that aren’t registered for GST aren’t typically required to issue invoices, but you must give customers a receipt if the sale exceeds $75 Australian dollars (AUD) or if they request one.

• Tax invoice: Use this when your business is registered for GST and you’re supplying taxable goods or services. You’re legally required to issue this invoice when a customer requests it or when the purchase is over $82.50 AUD (including GST).

• Proforma invoice: Use this if you’re confirming a price before dispatch or finalization. This is common in manufacturing, wholesale, and any context where goods ship before payment clears. Keep in mind that this isn’t an invoice in the traditional sense and does not include a demand for payment.

How do the different invoice types affect your accounting and tax obligations?

The invoice type you issue serves as evidence for how a transaction is treated in your books and on your BAS. Neither standard nor proforma invoices create a GST obligation. But when you issue a tax invoice, you’re reporting a GST liability, and when you receive a tax invoice, you’re creating an input tax credit entitlement. The ATO requires credits to be substantiated by valid tax invoices. If you’re claiming on your BAS and can’t produce the underlying documents, you might have a problem.

What are the risks of using the wrong invoice type in Australia?

Using the wrong invoice type creates compliance exposure that can take time to surface.

If you issue a standard invoice when a tax invoice is required, and your customer tries to claim input tax credits, the document won’t meet the ATO’s requirements and their claim won’t be supported. That can create delayed payments and disputes, particularly in B2B relationships in which the buyer’s finance team is reconciling GST.

If you issue a tax invoice when you’re not GST-registered, you’re collecting money you’re not entitled to and can’t remit correctly. That’s a GST compliance issue, with implications that reach beyond accounting alone.

How can businesses best manage their invoicing process?

Consistent invoicing practice relies on a few decisions made early and maintained over time.

Here’s what you need to get right:

• Know your GST status and revisit it: Your invoicing obligations change the moment your turnover hits $75,000 AUD, the threshold at which you must register for GST. Many businesses that started issuing standard invoices don’t update their templates or processes when they hit the threshold. Set a time to review your status.

• Use invoice templates that meet ATO requirements by default: Every tax invoice template you use should have the required fields already built in (i.e., the seller’s identity and Australian Business Number, tax invoice label, GST breakdown, issue date, description of goods or services). If the invoice is for $1,000 AUD or more, you’ll also need to include the buyer’s details. If you’re building invoices manually, check them against the ATO’s tax invoice checklist.

• Number your invoices sequentially and keep full records: You’re required to keep business records for five years after the transaction. A consistent numbering system makes reconciliation easier and reduces the risk of duplicates.

Software can handle many of these tasks. Stripe Invoicing generates tax-compliant invoices automatically and calculates GST based on the tax settings you configure. Stripe also supports multicurrency invoicing and applies the right tax treatment based on the customer’s location, which helps Australian businesses serving both domestic and international customers. You can also customize invoice templates to meet specific field requirements without rebuilding your workflow each time.

How Stripe Invoicing can help

Stripe Invoicing simplifies your accounts receivable (AR) process—from invoice creation to payment collection. Whether you’re managing one-time or recurring billing, Stripe helps businesses get paid faster and streamline operations:

• Automate accounts receivable: Easily create, customize, and send professional invoices—no coding required. Stripe automatically tracks invoice status, sends payment reminders, and processes refunds, helping you stay on top of your cash flow.

• Accelerate cash flow: Reduce days sales outstanding (DSO) and get paid faster with integrated global payments, automatic reminders, and AI-powered dunning tools that help you recover more revenue.

• Enhance the customer experience: Deliver a modern payment experience with support for 25+ languages, 135+ currencies, and 100+ payment methods. Invoices are easy to access and pay through a self-serve customer portal.

• Reduce back-office workload: Generate invoices in minutes and reduce time spent on collections through automatic reminders and a Stripe-hosted invoice payment page.

• Integrate with your existing systems: Stripe Invoicing integrates with popular accounting and enterprise resource planning (ERP) software, helping you keep systems in sync and reduce manual data entry.

Learn more about how Stripe can simplify your accounts receivable process, or get started today.

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