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
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. Note 1. To be able to issue RCTIs the non-resident must satisfy all of the requirements in the RCTI Determination. Note 2. The entity, as agent, can also issue RCTIs, on behalf of its non-resident principal. The requirements of the GST Act are satisfied where the agent's name and address or Australian business number (ABN) are used instead of the recipient's name and address or ABN (paragraph 73 of Goods and Services Tax Ruling GSTR 2000/37).