When they’re used
In some cases a buyer is in a better position than a seller to determine the price of goods or services. The buyer issues the tax invoice rather than the seller.
Buyer-created tax invoices are most commonly used in New Zealand’s primary industries such as farming, fishing and wine-growing.
In these industries, the value of the goods is only known after the buyer processes them.
An example is an abattoir buying sheep from a farmer. The abattoir weighs, slaughters and prices the sheep. It also determines other costs such as levies. The abattoir is in a better position than the farmer to issue a tax invoice.
Rules for buyer-created tax invoices
GST-registered buyers need to get our approval to issue buyer-created tax invoices.
A buyer can be approved to issue invoices for:
- particular goods or services
- a particular supplier or group of suppliers.
A buyer-created tax invoice can only be used if both the buyer and the seller:
- are GST-registered
- agree in writing that only the buyer will issue the tax invoice
- keep a copy of the tax invoice.
A buyer-created tax invoice must show:
- the standard information for a tax invoice
- the buyer’s and seller’s GST numbers
- the words ‘buyer-created tax invoice – IRD approved’ in a prominent place.
- 15% GST added to the gross supply of goods or services
- 15% GST added to any deductions or charges.
Here's an example of a buyer-created tax invoice.