For the owners of Australia’s roughly 2.7 million businesses, knowing the difference between a regular invoice and a tax invoice is an important part of operations. Understanding when to use each is required for customers who need goods and services tax (GST) credits.

Below, we’ll explain the difference between a tax invoice and a regular invoice in Australia, when each is required, and how to use them correctly.

What’s in this article?

• What’s a tax invoice vs. regular invoice in Australia?
  
• What does a regular invoice in Australia include?
  
• What do businesses need to know about tax invoices under Australian GST rules?
  
• When do businesses need to issue a tax invoice in Australia?
  
• What information must a tax invoice include?
  
• Can businesses claim GST without a tax invoice?
  
• How can invoicing software help businesses comply with GST rules?
  
• How Stripe Tax can help
  

What’s a tax invoice vs. regular invoice in Australia?

The difference between a regular invoice and a tax invoice is GST. A regular invoice is used when you’re not charging GST; a tax invoice is required when you’re charging GST.

Only GST-registered businesses are allowed to issue tax invoices. These invoices must include your Australian Business Number (ABN), show your GST amount, and be clearly labeled “Tax Invoice.” Customers require a complete, correct tax invoice to be able to claim GST credits. Missing details, vague pricing, or an incorrect label can halt the claim.

What does a regular invoice in Australia include?

A regular invoice is a standard request for payment. Businesses issue this type of invoice when they aren’t registered for GST. There are no laws about what a nontax invoice must include, but it typically includes the business name, ABN (if the company has one), an invoice date, a unique invoice number, a description of the goods or services provided, the total amount payable, and payment terms.

What do businesses need to know about tax invoices under Australian GST rules?

A tax invoice is an official document that the Australian Taxation Office (ATO) uses to help track GST. It’s a necessary part of customers’ tax reporting. It allows customers to claim input tax credits (the GST they’ve paid on business expenses). If a business is registered for GST, it’s legally required to issue tax invoices for taxable sales. That applies to any sale where GST is charged, typically at the standard 10%.

Even if a business charges GST correctly, failing to issue a valid tax invoice can cause problems. The customer won’t be able to claim their GST credit, and the business could face compliance issues if the ATO reviews its records.

When do businesses need to issue a tax invoice in Australia?

If your business is registered for GST, you must issue a tax invoice for any taxable sale over 82.50 Australian dollars (AUD), including GST, if your customer asks for it. Once the customer requests the invoice, you have 28 days to provide it.

Here’s how it breaks down:

• Sales over 82.50 AUD (including GST): You must provide a tax invoice if requested.

• Sales at or under 82.50 AUD (including GST): A full tax invoice isn’t required. A receipt or basic invoice is usually enough.

The 28-day window is important. Missing it can delay a customer’s business activity statement (BAS) and potentially cause problems with the ATO.

What information must a tax invoice include?

If you’re issuing a tax invoice, the ATO expects you to get the details right. This enables the ATO to verify GST claims.

Here’s what a valid tax invoice must include:

• The words “tax invoice”

• The seller’s business name

• The seller’s ABN

• Date of issue

• Description of goods or services (including quantity and price)

• GST amount, shown per item or stated as, “Total price includes GST,” if the GST amount is exactly one-eleventh of the total

• The extent to which each sale is taxable

Invoices of 1,000 AUD or more must include the buyer’s identity or ABN.

If any of these details are missing, even a seemingly small detail, the invoice might not be valid. That can prevent your customer from claiming GST and create issues for you if the invoice is reviewed. Using a reliable invoice template or tool that adheres to these rules by default ensures the requirements are met every time.

Can businesses claim GST without a tax invoice?

If you’re registered for GST and want to claim input tax credits, the ATO requires a valid tax invoice for expenses above the 82.50 AUD threshold (including GST). For expenses of 82.50 AUD or less (including GST), you can claim GST without a full tax invoice as long as you have some form of evidence (e.g., cash register docket, receipt).

If your supplier hasn’t given you a tax invoice for a larger purchase, you can request one. They’re legally required to issue it within 28 days.

How can invoicing software help businesses comply with GST rules?

Staying GST-compliant means following the rules consistently for every invoice. That’s where good invoicing software can make a real difference.

Built-in compliance

• Automatically labels invoices as “Tax Invoice” when GST is applied

• Inserts your ABN and issue date by default

• Calculates GST accurately, whether it’s shown separately or included in the total

Smarter formatting

• Separates GST-free and taxable items

• Flags invoices that total over 1,000 AUD so buyer details aren’t missed

Records are stored, searchable, and ready for BAS reporting or audits.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Stripe Tax helps you monitor your obligations and alerts you when you exceed a tax registration threshold based on your Stripe transactions. In addition, it automatically calculates and collects sales tax, value-added tax (VAT), and GST on both physical and digital goods and services—in all US states and in more than 100 countries.

Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful application programming interface (API).

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration or add tax collection with the click of a button in the Stripe Dashboard.

• Register to pay tax: Let Stripe manage your global tax registrations and benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations.

• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.

• Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.

Learn more about Stripe Tax, or get started today.