Goods and Services Tax: Waiver of Requirement to hold a Tax Invoice Determination 2017 – Members of MasterCard International and Visa International – Bank Interchange Services

Administered by Department of the Treasury

Legislation au F2017L00427 In force Legislative Instrument

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Explanatory Statement

 

Goods and Services Tax: Waiver of Requirement to hold a Tax Invoice Determination 2017 – Members of MasterCard International and Visa International – Bank Interchange Services
 

 

General outline of determination

  1. This determination is made under subsection 29-10(3) 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 determination 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 allows a member to claim input tax credits related to bank interchange services without holding a tax invoice in certain circumstances.
  4. This determination is a legislative instrument for the purposes of the Legislation Act 2003.

 

Date of effect

5.        This determination will commence retrospectively on 1 April 2017. This is to allow for reasonable and appropriate consultation to be completed.

6.         Subsection 12(2) of the Legislation Act 2003 allows a retrospective application date for a Legislative Instrument. This determination aims to reduce compliance costs.  A commencement date after 1 April 2017 would create unexpected compliance obligations for the intervening period. To provide certainty to taxpayers who have relied upon the previous determination and continue to rely on this determination and protect the rights of all affected taxpayers the retrospective application date is reasonable and appropriate. The retrospective application date will not adversely affect the rights of any person and will not impose a liability on any person for any act or omission before this instrument’s registration date.

What is the determination about?

7.        The basic attribution rules in subsection 29-10(3) of the GST Act generally require an entity to hold a tax invoice before being able to attribute the input tax credit (or any part of the input tax credit) to a tax period.

8.        Subsection 29-10(3) of the GST Act  also provides that the requirement to hold a tax invoice does not apply in circumstances of a kind determined in writing by the Commissioner to be circumstances in which the requirement for a tax invoice does not apply.

9.        The determination waives the requirement to hold a tax invoice before being able to attribute input tax credits for a member that acquires bank interchange services provided the member holds a bank interchange services report that  satisfies certain information requirements in subclause 5(2) of the determination.

 

What is the effect of this determination?

 

10.    The determination provides that a member that holds a bank interchange services report prior to lodging their GST return, where the bank interchange services report satisfies the information requirements set out in in subparagraph 5(2) of the determination, will not need to hold a tax invoice for acquisitions of bank interchange services recorded on the report.

11.    The determination is substantially the same as the previous determination that it replaces. An entity that satisfied the requirements of the previous determination will satisfy the requirements of this determination.

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.    The determination replaces determination A New Tax System (Goods and Services Tax) Act 1999 Waiver of Requirement to hold a Tax Invoice Determination 2000 - Members of MasterCard International And Visa International (previous determination), registered on 11 January 2007. The previous determination is repealed from 1 April 2017.

 

Consultation

14.    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.

15.    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 statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Goods and Services Tax: Waiver of Requirement to hold a Tax Invoice Determination 2017 – Members of MasterCard International and Visa International – Bank Interchange Services

 

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 legislative Instrument

 

The legislative instrument waives the requirement in subsection 29-10(3) of the A New Tax System (Goods and Services Tax) Act 1999 for members to hold a tax invoice before being able to attribute an input tax credit to a tax period where a member has made a creditable acquisitions of bank interchange services and holds a bank interchange services report provided certain information requirements are met.

 

Human rights implications

 

This legislative instrument does not engage any of the applicable rights or freedoms. It allows for a member to attribute an input tax credit without holding a tax invoice for bank interchange services in certain circumstances.

 

Conclusion

 

This legislative instrument is compatible with human rights as it does not raise any human rights issues.

 

 

 

 

Overview

The Goods and Services Tax: Waiver of Requirement to hold a Tax Invoice Determination 2017, enacted under the A New Tax System (Goods and Services Tax) Act 1999, addresses the need for a streamlined process for members of MasterCard International and Visa International to claim input tax credits for bank interchange services without the requirement to hold a tax invoice. This determination, made by the Commissioner for Taxation under the authority granted by the GST Act, aims to reduce compliance costs by allowing members to rely on a bank interchange services report that meets certain information criteria. The determination was introduced to provide certainty and continuity for taxpayers who had been relying on the previous similar determination, ensuring no unexpected compliance obligations arose during the transition period. The retrospective application date of 1 April 2017 ensures that the rights of all affected taxpayers are protected and no new liabilities are imposed on actions taken before the determination was registered.

Scope and Application

The Goods and Services Tax: Waiver of Requirement to Hold a Tax Invoice Determination 2017 applies to members of MasterCard International and Visa International who acquire bank interchange services, allowing them to claim input tax credits without holding a tax invoice under certain conditions. This determination, made under subsection 29-10(3) of the A New Tax System (Goods and Services Tax) Act 1999, waives the general requirement for holding a tax invoice, provided the member holds a bank interchange services report that satisfies specific information requirements outlined in the determination. It applies retrospectively from 1 April 2017, ensuring continuity for taxpayers who have relied on the previous determination. The scope is limited to the Commonwealth, specifically under the GST Act, and it does not extend to other entities or industries outside of this context. There are no stated exclusions or exemptions within this determination, and its application is not extended or restricted through subordinate instruments.

Key Provisions

The Goods and Services Tax: Waiver of Requirement to Hold a Tax Invoice Determination 2017 (the Determination) primarily operates under subsection 29-10(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). It specifically waives the requirement for members of MasterCard International and Visa International to hold a tax invoice before they can claim input tax credits for bank interchange services, provided they hold a bank interchange services report that meets certain information requirements as outlined in subclause 5(2) of the Determination. This waiver applies retrospectively from 1 April 2017, allowing for a seamless transition from the previous Determination that was repealed on the same date. The Determination ensures that members can attribute input tax credits to their tax periods without the necessity of holding a tax invoice, simplifying compliance for those involved in the specified transactions. Members of MasterCard International and Visa International who acquire bank interchange services and hold a bank interchange services report must ensure that the report meets the information requirements set out in subclause 5(2) of the Determination. This includes holding the report prior to lodging their GST return. The Determination also requires that the report contain sufficient details to attribute the input tax credit to the relevant tax period. Members must maintain records of their bank interchange services transactions and the corresponding reports to substantiate their claims for input tax credits. These obligations are designed to maintain the integrity of the GST system while reducing the administrative burden on affected members. Breaching the requirements set out in the Determination could result in the inability to claim input tax credits for bank interchange services. Although the Determination does not explicitly state penalties for non-compliance, general GST laws apply. Non-compliance with GST obligations can lead to penalties, including fines of up to $22,200 per offence for individuals and $111,000 for corporations, as per the GST Act. Additionally, the Commissioner of Taxation may disallow input tax credits claimed without proper documentation, potentially resulting in additional tax liabilities and interest. It is crucial for members to adhere to the requirements to avoid any adverse consequences under the GST Act.

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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.