In Australia, the difference between a tax invoice and a receipt is important for goods and services tax (GST) compliance, Australian Taxation Office (ATO) reporting, and a business’s financial records. Understanding the distinction helps businesses avoid compliance mistakes, maintain the proper documentation for customers, and build a cleaner path through business activity statement (BAS) lodgements and audits. In 2024–2025, ATO compliance activities recovered $4.11 billion Australian dollars (AUD) in income tax liabilities and $359 million AUD in GST—a reminder that even small errors can add up.

Below, we’ll explain the rules behind the tax invoice vs. receipt in Australia: what defines a valid tax invoice, what a receipt must include, and how each one affects GST input tax credits and obligations.

What’s in this article?

• What’s the difference between a tax invoice and a receipt in Australia?
  
• Why does the difference between a tax invoice and a receipt matter?
  
• How does GST registration affect invoicing and receipts?
  
• When are businesses required to issue a tax invoice?
  
• What common mistakes occur when issuing tax invoices or receipts?
  
• How should Australian businesses handle tax invoices and receipts for reporting and audit purposes?
  
• How Stripe Invoicing can help
  

What’s the difference between a tax invoice and a receipt in Australia?

A receipt confirms a payment has been made, while a tax invoice establishes how GST applies to that payment. The two contain similar details: what was sold, for how much, and who the seller is. But receipts and tax invoices serve different purposes in Australia’s tax system. Understanding their overlap and their differences is central to compliance.

Here’s the information commonly shown on both:

• Business name: This identifies who made the sale. Customers need it for returns, warranties, and their documentation.

• Seller’s Australian Business Number (ABN): This links the transaction to a specific entity and prevents confusion when businesses operate under multiple trading names.

• Date of the transaction: This confirms when the sale occurred, which matters for warranties, refund windows, and audit trails.

• Description of goods or services: This is a brief, accurate description that shows what was purchased and helps resolve disputes about what was supplied.

• Total amount paid: This is the full price the customer paid. For tax invoices, this must show the GST amount or state that the price includes GST.

Here’s how they differ:

• Label: A tax invoice must be labelled “Tax Invoice” to indicate GST has been collected.

• ATO requirements: Tax invoices must meet stricter ATO documentation standards, including a detailed breakdown of how GST applies.

• Customers’s ABN: For invoices $1,000 AUD or more, tax invoices should include the customer’s name or ABN.

Receipts can double as tax invoices if they meet these requirements, but many everyday receipts don’t.

Why does the difference between a tax invoice and a receipt matter?

For GST-registered businesses, a tax invoice is the only accepted evidence for claiming GST credits on purchases over $82.50 AUD (including GST). If a supplier provides a receipt without the required tax information, the customer doesn’t have what they need to substantiate a credit. On the seller’s side, issuing a tax invoice signals that GST was charged and must be reported in the next BAS. The document affects how tax flows into and out of the business.

Businesses must give customers proof of purchase for sales of $75 AUD or more (excluding GST), and a receipt satisfies that requirement. A tax invoice can satisfy the requirement—but only if it’s issued and accurate. A mislabeled or incomplete document can breach Australian Consumer Law, ATO reporting rules, or both, depending on the mistake.

How does GST registration affect invoicing and receipts?

GST registration changes how a business documents every sale because it determines whether GST should appear anywhere on an invoice or a receipt. Here’s how it works:

GST-registered businesses

GST-registered businesses must document each taxable sale in a way that makes the GST treatment explicit. Their invoices should be labelled appropriately when GST applies, show the seller’s ABN, describe the sale, and present the GST as a separate amount or as a note that the total price includes GST.

Even receipts from GST-registered businesses usually reflect the tax treatment, often with a line showing the GST component or a statement that GST is included. Many point-of-sale (POS) systems generate receipts that meet tax invoice requirements for smaller transactions ($82.50 AUD or less), which makes it easy for customers to claim credits.

Non-GST-registered businesses

Non-GST-registered businesses are not required to include GST information because they cannot charge or claim GST. Their invoices should simply detail the sale and, ideally, include a note, such as “No GST has been charged,” to avoid confusion. If they have an ABN, the number should still appear on invoices and receipts because customers—especially business customers—often need it for their records. But the document should not imply tax was charged when it wasn’t.

When are businesses required to issue a tax invoice?

Tax invoices are required for sales over $82.50 AUD (GST-inclusive). If a customer requests a tax invoice for any taxable sale, a GST-registered business is required to issue one. The ATO allows 28 days to send the tax invoice, but customers often expect it immediately because they can’t claim GST credits until they have it.

Even without a request, tax invoices are standard for B2B transactions because they eliminate delays in payment approval, reimbursement, and GST credit claims. That’s why many GST-registered businesses issue tax invoices by default as part of their billing flow.

Digital invoicing systems often automate the process. Once the sale is recorded, the customer receives a compliant tax invoice with the GST detail and the seller’s ABN. This consistency also reduces the risk of errors that could require corrected documents to be reissued.

What common mistakes occur when issuing tax invoices or receipts?

Small mistakes can create compliance issues or force customers to chase corrected documents.

Here’s what to avoid:

• Leaving out required details: Missing an ABN, a date, an item description, or GST information can make an otherwise accurate document invalid for tax purposes.

• Misstating or obscuring GST: Showing a total that includes GST without saying so or listing GST when you’re not registered to charge it creates confusion and compliance risk.

• Using “Tax Invoice” incorrectly: Only GST-registered businesses can use that label—and only when GST applies. Mislabeling an invoice can lead customers to believe GST is being charged when it isn’t.

• Missing deadlines for providing documents: Not issuing a tax invoice within the ATO’s 28-day window or providing receipts when required under consumer law disrupts customers’ recordkeeping and can breach regulations.

• Having inconsistent or misleading fine print: Refund or warranty language that contradicts Australian Consumer Law can cause problems, even if it’s unintentional.

• Allowing poor internal recordkeeping: Losing copies of invoices or receipts makes BAS preparation and audits more difficult than they need to be.

How should Australian businesses handle tax invoices and receipts for reporting and audit purposes?

Invoices and receipts are the foundation of accurate BAS lodgements, GST credit claims, and audit readiness. Here are best practices to follow:

Keep records for at least five years

The ATO requires businesses to keep invoices, receipts, and related documents for at least five years. This applies to paper and digital copies as long as they’re clear, complete, and accessible.

Organise documents around reporting cycles

BAS preparation depends on knowing exactly how much GST was charged and paid during each reporting period. Well-organised tax invoices make this process faster and reduce the risk of incorrect reporting.

Maintain accurate purchase documentation

You can only claim GST credits if you have a valid tax invoice. Keeping supplier documents sorted and easy to retrieve protects those credits during review or audit.

Use digital systems to automate storage

Cloud-based invoicing or payment tools automatically archive issued invoices and receipts, which makes them easy to locate.

Reconcile transactions regularly

Matching bank transactions with invoices and receipts helps catch errors early and keeps your reporting accurate.

Standardise staff workflows

When everyone follows the same process for issuing, saving, and categorising documents, the whole system becomes more reliable.

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, customise, 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.