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Posts Tagged ‘invoicing’

Recipient Created Tax Invoices (RCTI)

Posted on: April 21st, 2016

Businesses normally issue an invoice to the customer once the service is provided or the product is sold. However, independent salespeople often do not know how much commission they have earned in order to issue an invoice to the direct selling business.

Recipient Created Tax Invoices can sometimes be issued by the direct selling company (the recipient of the supply) rather than by the independent salesperson (the supplier). However, this is not a simple process and businesses often incorrectly use RCTI. Some of the common mistakes include:

1. The direct selling business (the recipient) does not meet the $20 million revenue threshold

2. The independent salesperson (the supplier) fails to register for GST

3. The direct selling business and the independent salesperson do not have a written agreement specifying the supplies to which the RCTI relates and that it is current when the RCTI is issued.