RCTI vs Tax Invoice: What's the Difference?
Both an RCTI and a standard tax invoice serve the same core purpose — documenting a taxable supply for GST purposes. The key difference is who creates the document. This page breaks down every difference to help you determine which one applies to your business.
Side-by-Side Comparison
| Feature | Standard Tax Invoice | RCTI |
|---|---|---|
| Created by | Supplier (seller) | Recipient (buyer) |
| Document label | "Tax Invoice" | "Recipient Created Tax Invoice" |
| Written agreement | Not required | Required before first RCTI |
| GST registration | Supplier must be registered | Both parties must be registered |
| Supply type | Any taxable supply | Taxable supply only (not GST-free) |
| Compliance statements | Standard | Additional: GST payable by supplier, no duplicate invoice |
| Supplier objection | N/A | 21-day objection period |
| Common use case | Most business transactions | Buyer-determined pricing, high-volume suppliers |
When Should You Use an RCTI?
Use an RCTI when:
- You (the buyer) are better positioned to determine the value of the supply
- You deal with many suppliers and want to centralise invoice creation
- The supplier agrees to the arrangement and both parties are GST-registered
Use a standard tax invoice when:
- The supplier sets the price and issues their own invoices
- Either party is not registered for GST
- The supply is GST-free or input-taxed
Can Both Exist for the Same Supply?
No. This is a critical compliance point. If an RCTI has been issued for a supply, the supplier must not issue a standard tax invoice for the same supply. Doing so creates a duplicate tax document and can cause GST accounting errors and ATO compliance issues.
This is why the written agreement explicitly states that the supplier will not issue their own tax invoices for supplies covered by the RCTI arrangement.
Impact on BAS Reporting
Both RCTIs and standard tax invoices support GST claims on your Business Activity Statement (BAS). The recipient can claim input tax credits based on a valid RCTI just as they would with a standard tax invoice — as long as all compliance requirements are met.
The supplier must still report the GST from an RCTI in their BAS, even though they didn't create the document.
Need to Create an RCTI?
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