What Is a Tax Invoice? Purpose & Requirements

A tax invoice is an official record that shows the amount of tax included in the price of goods or services. If you run a business that charges GST, you’re legally required to issue tax invoices that clearly show this information.

Accurate, compliant tax invoices make life easier for your customers, accountant, and end-of-year reporting. The right accounting software can help you stay on top of your obligations while keeping your invoicing process smooth and stress-free. 

Here, we’ll walk through how to write a tax invoice that meets the requirements set by the Australian Taxation Office (ATO).

Key Takeaways

• All tax invoices must include specific details to be ATO compliant
• Different rules apply for sales under and over $1,000
• Keeping proper records is a legal requirement
• Digital tools make it easy to create and manage tax compliant invoices

What are tax invoices?

Tax invoices are documents that show what was sold, how much it cost, and how much tax applies. They’re used in day-to-day business operations to confirm the value of a transaction and allow customers to claim GST credits.

A typical tax invoice lists the price before tax, the GST amount, and the total payable. For example, if you sell $100 in goods with 10% GST, your tax invoice would show $100 + $10 GST = $110 total. You can issue these manually or produce them using online tax invoice tools.

Invoices vs tax invoices:

A standard tax invoice breaks down the tax amount line-by-line, while a regular invoice might just show the final total. If you're registered for GST, you must issue tax invoices—they're your legal proof that you have collected the right amount of tax.

Tax invoices vs receipts:

Tax invoices and receipts serve different purposes. A receipt is a simple proof of purchase, while a tax invoice is a formal document that details the tax component and meets government compliance standards.

What needs to be included on a tax invoice

Wondering how to write a tax invoice that meets ATO requirements? Here’s what needs to be on a tax invoice to stay compliant:

• The words "Tax Invoice" (usually at the top)
• Your business name, address, and contact details
• An invoice number or other type of unique identifier
• Date of issue
• Customer's name and address
• Australian Business Number (ABN)
• Quantity and description of goods/services
• Unit price before tax
• Tax amount per unit
• Subtotal, total tax, and grand total
• Payment terms and due date
• Your payment details (bank account, etc.)

Tax invoice example 

Here's what a properly formatted tax invoice looks like in practice:

Tax invoice requirements and best practices

Solid invoicing practices keep your cash flow healthy and your records accurate. Here's what to focus on:

• Include all the essentials: Don't rush through invoice details—make sure every required field is completed and your invoice is easy for customers to understand.
• Stay organised with records: Keep all your invoices stored in one central location, whether that's a filing system, cloud storage, or accounting software, so you can find them easily when needed.
• Follow up on overdue payments: Stay on top of due dates and send reminders for unpaid invoices. Late payments can drain your cash flow, so proactive follow-up is essential to your business's financial health.

For sales under $1,000

For smaller transactions, simplified tax invoices are allowed in Australia. You can omit the customer's ABN and address, but you'll still need to include all other standard details. Keep a record of all invoices, even if they're simplified.

For sales over $1,000

Full-format tax invoices are required for transactions over $1,000. Include every detail, including the customer’s ABN, full address, itemised breakdown, and all tax calculations. Nothing can be left out.

For sales in other jurisdictions

If you're selling internationally, GST rules may differ. Check the specific requirements for each jurisdiction—what's compliant in one place might not be in another. It’s a good idea to consult a tax advisor for complex situations.

ATO compliant tax invoices

An ATO-compliant tax invoice includes all mandatory details, has clear tax calculations, and follows the format guidelines. The easiest way to ensure compliance is using an invoice template or automated invoicing tools.

Create and send tax compliant invoices with Intuit QuickBooks

Tax invoices are essential for compliance, helping customers claim GST credits, and keeping your books accurate. The right digital tools make it easy to create, send and track them—without the manual admin.

Intuit QuickBooks helps you produce tax compliant invoices in minutes, monitor payments, and store everything securely. Ready to streamline your process? Try Intuit QuickBooks today.