A tax invoice is a document that includes GST/VAT information and your registration number. It is required for customers to claim input tax credits on their purchases from you.
A tax invoice is a specific type of invoice required under GST/VAT systems. It must contain prescribed information including your business name, ABN or VAT registration number, the date of issue, a description of goods or services, the GST/VAT amount (shown separately or stated as included in the price) and the total amount. For invoices above certain thresholds (for example, $1,000 in Australia or GBP 250 in the UK), additional information is required including the buyer's name and address. Without a valid tax invoice, the buyer cannot claim an input tax credit for the GST/VAT on the purchase. This makes correct tax invoicing essential for business-to-business transactions. The requirements vary by country: Australian tax invoices need an ABN, UK VAT invoices need a VAT registration number, and GST invoices in New Zealand need an IRD number. SortBooks works with Xero's invoicing system to ensure all required tax invoice fields are present and correctly populated, maintaining compliance for both you and your customers.
SortBooks helps with the bookkeeping behind tax invoice by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing tax invoice by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
GST is a broad-based consumption tax applied to most goods and services. Businesses collect GST on sales and claim credits for GST paid on purchases, remitting the net amount to the tax authority.
VAT is a consumption tax charged on goods and services at each stage of production and distribution. Businesses collect VAT on sales and reclaim VAT on purchases, remitting the net amount.
An invoice is a document sent to a customer requesting payment for goods or services provided. It includes details of the transaction, payment terms and the amount due.
An input tax credit is the GST/VAT you paid on business purchases that you can claim back from the tax authority. It offsets the GST/VAT you collected on sales.
An ABN is a unique 11-digit identifier issued by the Australian Business Register to businesses and organisations operating in Australia.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.