Many Australian freelancers and small business owners use the terms “invoice” and “tax invoice” interchangeably. They are not the same thing. Using the wrong type can cause compliance issues for both you and your client. Here is exactly when to use each, and what the differences are.
The key difference
A tax invoice is a document issued by a GST-registered business when making a taxable supply. It records the GST component and allows the recipient to claim GST input tax credits. Only GST-registered businesses can issue tax invoices.
A regular invoice(sometimes called a “standard invoice” or simply “invoice”) is used by businesses that are not registered for GST, or for supplies that are GST-free or input-taxed. No GST is charged, and the document must not be titled “Tax Invoice”.
When to use a tax invoice
Use a tax invoice when:
- You are registered for GST
- The sale is $82.50 or more including GST
- The supply is a taxable supply (not GST-free or input-taxed)
- Your client is entitled to claim input tax credits
When to use a regular invoice
Use a regular invoice when:
- You are NOT registered for GST (annual turnover under $75,000 and not voluntarily registered)
- The supply is GST-free (e.g. basic foods, some medical services, exports)
- The supply is input-taxed (e.g. financial services, residential rents)
- The sale is under $82.50 including GST (a full tax invoice is not required but can still be issued)
Comparison: what is on each type
| Field | Tax Invoice | Regular Invoice |
|---|---|---|
| "Tax Invoice" heading | ✓ Required | ✗ Must NOT use |
| Your ABN | ✓ Required | ✓ Required |
| Your name/business name | ✓ Required | ✓ Required |
| Date | ✓ Required | ✓ Required |
| Description of supply | ✓ Required | ✓ Required |
| GST amount shown | ✓ Required | ✗ Not shown |
| Total amount payable | ✓ Required | ✓ Required |
| Buyer identity/ABN ($1,000+) | ✓ Required | ✗ Not required |
| Who can issue | GST-registered only | Any business |
The biggest mistake: using the wrong title
The single most common error is issuing a document titled “Tax Invoice” when you are not GST-registered. This creates a false impression that GST has been charged. Your client may then attempt to claim a GST input tax credit they are not entitled to, which can result in ATO scrutiny of their tax return.
Equally, if you are GST-registered and issue a document called “Invoice” instead of “Tax Invoice”, your client cannot use it to claim GST credits — even if the GST amount is shown. The title matters.
How AusInvoice handles this automatically
AusInvoice has a single GST toggle. When GST is off, the document is titled “Invoice” and no GST line items appear. When GST is on, the document is titled “Tax Invoice”, the 10% GST is calculated and displayed, and all ATO-required fields are present. You cannot accidentally use the wrong document type.