ATO ID 2004/947: GST and written recipient created tax invoice agreement entered into by a resident agent on behalf of a non-resident recipient
Date of decision: 17 March 2004
Business line: Indirect Tax

Issue
Can the entity, an agent for a non-resident recipient, enter into the written agreement required by clause 4(f) of the A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 1) 2000 (RCTI Determination), so that the non-resident can issue recipient created tax invoices (RCTIs) to its supplier?

Decision
Yes, the entity can enter into the written agreement required by clause 4(f) of the RCTI Determination so that the non-resident can issue RCTIs to its supplier.

Facts
The entity is an agent for a non-resident recipient. The entity and the non-resident are registered for goods and services tax (GST). The non-resident instructs the entity, its agent, to enter into written agreements with the Australian suppliers.

Reasons for decision
Summary: Clause 4(f) of the RCTI Determination provides that the recipient must issue the RCTI pursuant to a written agreement that the 'recipient has with the supplier'. When an agent uses its authority to act for a principal, then any act done on behalf of that principal is an act of the principal. As such, a written agreement entered into by an agent, on behalf of their principal, will be an agreement entered into by the principal. The non-resident recipient has instructed the entity to enter into the written RCTI agreement, on its behalf, with the Australian suppliers. Therefore, the entity can enter into the agreement required by clause 4(f) of the RCTI Determination so that the non-resident can issue RCTIs to its supplier.

Related public rulings and determinations: GSTR 2000/37 | A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 1) 2000, clause 4(f)
Subject references: Goods and services tax GST international services Connected with Australia GST resident agents GST invoices Recipient created tax invoices