Goods and Services Tax: (Particular Attribution Rules for Retention Payments) Determination 2017

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Legislation au F2017L00344 In force Legislative Instrument

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Explanatory Statement

 

Goods and Services Tax: (Particular Attribution Rules for Retention Payments) Determination 2017
 

 

 

General outline of determination

  1. This determination is made under subsection 29-25(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
  2. Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws) the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such determination.
  3. This determination sets out particular attribution rules for a taxable supply or creditable acquisition made under a contract that provides for retention of some or all of the consideration until certain conditions of the contract (certain conditions) are met. 
  4. The determination is a legislative instrument for the purposes of the Legislation Act 2003.

Date of effect

5.      This determination commences on the day after its registration on the Federal Register of Legislation.

What is this determination about

6.      Sections 29-5 and 29-10 of the GST Act set out the rules for attributing GST and input tax credits on your taxable supplies and creditable acquisitions.

7.      This determination sets out special attribution rules for entities that report on a non-cash basis. These circumstances involve a taxable supply or creditable acquisition made under a contract that provides for retention of some or all of the consideration until certain conditions are met.

What is the effect of this determination

Particular attribution rules for GST payable on a taxable supply
 

8.      Where you make a taxable supply under a contract that provides for some or all of the consideration to be retained by the recipient until certain conditions are met, the GST payable on the non-retained consideration is attributable, to the earlier of, the tax period in which:

(a)   any part of the consideration is received for the supply; or

(b)   the tax period in which you issue a tax invoice relating to the supply.

9.      The GST payable on a retention amount under the contract is attributed to the earlier of the tax period in which:

(a)   the retained amount is received; or

(b)   an invoice for the retention amount is issued. 

Particular attribution rules for input tax credits on a creditable acquisition

 

10.  Where you make a creditable acquisition, under a contract that provides for some or all of the consideration to be retained by you until certain conditions are met, the input tax credit on the non-retained consideration is attributable to the earlier of, the tax period in which:

(a)   you provide any consideration for the acquisition; or

(b)   an invoice relating to the acquisition is issued.

11.  The input tax credit on a retention amount is attributed to the earlier of the tax period in which:

(a)   you provide the retained amount; or

(b)   an invoice for the retained amount is issued.

12.  Compliance Cost Impact: Minor – there will be no or minimal impact for both implementation and ongoing compliance costs. The legislative instrument is minor or machinery in nature.

Background

13.  This determination replaces A New Tax System (Goods and Services Tax) Act 1999 (Particular Attribution Rules for Retention Payments) Determination (No. 1) 2000 (F2006B11652). The previous determination is repealed on the commencement of the determination.

14.  The determination is substantially the same as the previous determination that it replaces (F2006B11652). There is a minor change to the definition of the term ‘invoice for the retention amount’. This change provides that the invoice for the retention amount is the document issued notifying of obligation to pay upon certain conditions being met or following the expiry of the defects liability period.

15.  There is also a minor change to the definition of ‘retention amount’ to recognise that there may be multiple retention amounts, or a retention amount may be paid, received or invoiced in parts.

Consultation:

16.  Subsection 17(1) of the Legislation Act 2003 requires, before the making of a determination, that the rule-maker is satisfied that appropriate and reasonably practicable consultation has been undertaken.

 

17.  Broad consultation has been undertaken. The draft determination and draft explanatory statement were published on the ATO Legal database at ato.gov.au seeking feedback and comments for a period of two weeks. Notice of the draft determination was also published to ato.gov.au and subscription alerts issued. Tax professionals and tax associations regularly review both the Legal database and ato.gov.au and further promulgate advice of new drafts issued in their internal news bulletins. The major legal publishers also publish news of the drafts in their key tax alerting services - such as the Weekly Tax Bulletin (published by Thomson Reuters Australia) and Tax Tracker and Tax Week (published by CCH Australia).  Additionally, draft determinations and draft explanatory statements have been published on the ATO Consultation Hub.  Links to these drafts were published organisations and newsletters such as the Taxation News (Chartered Accountants Australia and New Zealand) weekly bulletin. No comments have been received to date.

 


Legislative references:

 

A New Tax System (Goods and Services Tax) Act 1999

Acts Interpretation Act 1901

Legislation Act 2003

Human Rights (Parliamentary Scrutiny) Act 2011

Statement of Compatibility with Human Rights
 

This Legislative Instrument is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Goods and Services Tax: (Particular Attribution Rules for Retention Payments) Determination 2017
 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Bill/Legislative Instrument

 

Sections 29-5 and 29-10 of the GST ACT set out the rules for attributing GST and input tax credits on your taxable supplies and creditable acquisitions. This determination sets out special attribution rules for entities that report on a non-cash basis. This involves a taxable supply or creditable acquisition made under a contract that provides for the retention of some or all of the consideration until certain conditions are met.

 

Human rights implications

 

This Legislative Instrument does not engage any of the applicable rights or freedoms as all it does it set out special attribution rules for entities that report on a non-cash basis.

 

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

 

Overview

The Goods and Services Tax: (Particular Attribution Rules for Retention Payments) Determination 2017 is an instrument made under subsection 29-25(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). This determination establishes particular attribution rules for taxable supplies or creditable acquisitions made under a contract that provides for the retention of some or all of the consideration until certain conditions are met. The determination applies special rules to entities that report on a non-cash basis, ensuring that the GST payable and input tax credits are attributed appropriately in tax periods when the consideration is received or an invoice is issued. The purpose of this legislative instrument is to provide clarity and consistency in the attribution of GST and input tax credits for such transactions, thereby ensuring compliance with the GST Act. This instrument commenced on the day after its registration on the Federal Register of Legislation.

Scope and Application

The Goods and Services Tax: (Particular Attribution Rules for Retention Payments) Determination 2017 applies to entities involved in taxable supplies or creditable acquisitions made under contracts that provide for the retention of some or all of the consideration until certain conditions are met. These entities, which report on a non-cash basis, need to adhere to the particular attribution rules outlined in this determination for the purposes of calculating the GST payable and input tax credits. The Determination is made under the authority of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) and is applicable nationally across Australia as a Commonwealth legislative instrument. It specifies the attribution of GST and input tax credits based on when certain events occur, such as the receipt of consideration or the issuance of tax invoices. The Determination replaces an earlier version from 2000 and includes minor amendments to definitions. No significant exemptions or exclusions are mentioned, and it does not extend or restrict application beyond the scope of the rules provided.

Key Provisions

The Goods and Services Tax: (Particular Attribution Rules for Retention Payments) Determination 2017 (the Determination) sets out specific rules for attributing Goods and Services Tax (GST) and input tax credits in cases where a supply or acquisition is made under a contract that involves the retention of some or all of the consideration until certain conditions are met. This applies particularly to entities that report on a non-cash basis, as outlined in sections 29-5 and 29-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). The Determination clarifies when the GST payable on a taxable supply or the input tax credit on a creditable acquisition is attributable, depending on whether part of the consideration is received, or an invoice is issued. Entities subject to the Determination must ensure they comply with the special attribution rules. For taxable supplies, the GST payable on the non-retained consideration is attributable to the tax period in which any part of the consideration is received or when a tax invoice relating to the supply is issued. For the GST payable on a retention amount, it is attributed to the tax period in which the retained amount is received or when an invoice for the retention amount is issued. For creditable acquisitions, the input tax credit on the non-retained consideration is attributable to the tax period in which the consideration is provided or when an invoice relating to the acquisition is issued. Similarly, the input tax credit on a retention amount is attributed to the tax period in which the retained amount is provided or when an invoice for the retained amount is issued. The Determination imposes specific obligations on entities to accurately attribute GST and input tax credits according to the outlined rules. Failure to comply with these rules can result in errors in GST reporting and potential liabilities. There are no explicit penalties mentioned in the Determination itself; however, non-compliance with the GST Act generally can result in penalties. Under the GST Act, penalties can include fines and even imprisonment for serious breaches, depending on the nature and extent of the non-compliance. Additionally, entities may face civil consequences such as paying back taxes, interest, and additional amounts as determined by the Australian Taxation Office. The Determination repeals the previous A New Tax System (Goods and Services Tax) Act 1999 (Particular Attribution Rules for Retention Payments) Determination (No. 1) 2000, which it replaces, effective from the commencement date of the new Determination. The new Determination includes minor changes, such as updating the definition of 'invoice for the retention amount' and 'retention amount' to accommodate more flexible interpretations of retention payments. Broad consultation was undertaken before the making of the Determination, including publishing the draft on the ATO Legal database and other platforms to gather feedback. No comments have been received to date. The Determination is also compatible with human rights as it does not engage any of the applicable rights or freedoms, focusing solely on setting out special attribution rules for entities that report on a non-cash basis.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.