An RCTI, or recipient-created tax invoice, is a tax invoice that the buyer issues instead of the supplier. Rather than waiting for each owner-driver, grower or contractor to send you an invoice, you work out what they are owed from your own records and send the invoice to them. It is common in transport, agriculture, forestry and recycling, where the buyer holds the weighbridge tickets, delivery dockets or timesheets that set the price.
When can you issue an RCTI?
The ATO sets four conditions. You can issue an RCTI if:
- You and the supplier are both registered for GST when the RCTI is issued.
- You have agreed in writing that you will issue RCTIs and the supplier will not issue tax invoices for those supplies.
- The agreement is current when you issue the RCTI.
- The type of supply is covered by the ATO's Recipient Created Tax Invoice Determination 2023, which lists the kinds of goods and services that can be invoiced this way.
If any one of these isn't met, the document is not a valid tax invoice, which can affect your GST credits. Check your own situation with your accountant.
What the written agreement needs to say
The agreement can be a separate document or set out in the RCTI itself. It needs to:
- say which supplies it covers,
- confirm that you, the recipient, can issue tax invoices for those supplies,
- confirm that the supplier will not issue tax invoices for them,
- have the supplier acknowledge that they are registered for GST and will tell you if that changes,
- have you acknowledge that you are registered for GST and will tell the supplier if that changes.
Keep a copy for each supplier and note when it was signed, so you can show it was current for every RCTI you issued.
What an RCTI looks like
An RCTI shows the same details as a normal tax invoice, with the roles reversed: it is clearly marked as a recipient-created tax invoice, it identifies both businesses and their ABNs, and it lists what was supplied, the price and the GST. Most businesses also include the detail behind each line, such as the ticket or docket numbers, quantities, rates and any deductions, so the supplier can check it without phoning the office.
Who uses RCTIs?
RCTIs suit any business that holds the records that set a supplier's price and pays many suppliers the same way. Common examples:
- Transport and logistics: owner-drivers and subcontract carriers paid per load, kilometre or hour.
- Agriculture and grain: growers paid on delivered tonnes and quality.
- Forestry and timber: harvest and haulage contractors paid by the tonne from weighbridge tickets.
- Recycling and materials: suppliers of scrap or aggregates paid on weighed loads.
Why RCTIs take so long
The tax rules are not the hard part. The work is. In many businesses each pay cycle looks like this:
- Someone collects the dockets, tickets or timesheets from the job system, the weighbridge software or the paper tray.
- Rates, levies and deductions are applied in a spreadsheet that only one or two people fully understand.
- Each RCTI is typed up in Word or Excel and emailed.
- The same amounts are keyed into Xero or MYOB as bills.
- When a supplier queries a payment, someone traces the figure back through all of the above.
Every step is a chance for a mistake, and the whole process waits on the person who knows how the spreadsheet works.
Does Xero or MYOB handle RCTIs?
Xero has no built-in RCTI feature; it is a long-running request on Xero's product ideas forum. Businesses usually work around it by entering bills and producing the RCTI document separately. Whichever accounting system you use, the calculation from tickets or dockets usually happens outside it.
How to make RCTIs quicker and safer
- Take the records from the source. Pull tickets, dockets or timesheets straight from the system that records them, rather than retyping.
- Set the rates and rules up once. Rates, levies and deductions should be applied the same way every time, not rebuilt in a spreadsheet each cycle.
- Produce the RCTI and the bill from the same data. The supplier's RCTI and the bill in Xero or MYOB should come from one calculation, so they always match.
- Track agreements and GST registration. Record when each supplier's RCTI agreement was signed, and check their GST registration on ABN Lookup.
- Run old and new side by side until the figures match, before you switch over.
We do this kind of work as RCTI automation, often alongside weighbridge integration and for transport and logistics businesses.
Frequently asked questions
What does RCTI stand for?
Recipient-created tax invoice: a tax invoice issued by the buyer (the recipient of the goods or services) rather than the supplier.
Do both businesses need to be registered for GST?
Yes. Both the recipient and the supplier must be registered for GST when the RCTI is issued, and the written agreement should require each to tell the other if that changes.
Can the supplier still send their own invoice?
No. Under the agreement the supplier does not issue tax invoices for the supplies the RCTIs cover. Two tax invoices for the same supply cause problems for both sides.
Is there an RCTI template?
Any template needs to be clearly marked as a recipient-created tax invoice and show the usual tax invoice details. For businesses issuing many RCTIs each cycle, producing them automatically from the source records is safer than filling in a template by hand.
Where are the rules set out?
On the ATO's tax invoices pages and in the Recipient Created Tax Invoice Determination 2023. Your accountant can confirm how they apply to you.
If RCTIs take days each pay cycle in your business, book a free initial chat. We'll tell you honestly whether automating them is worth it.