{"id":"F2022L01265","name":"A New Tax System (Goods and Services Tax) Attribution Rules for Deferred Transfer Farm-out Arrangements Determination 2022","slug":"a-new-tax-system-goods-and-services-tax-attribution-rules-for-deferred-transfer-farm-out-arrangement","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":102688,"registerId":"commonwealth-F2022L01265-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"part","heading":"Name of instrument","content":"## 1 Name of instrument\n\nThis legislative instrument is the A New Tax System (Goods and Services Tax) Attribution Rules for Deferred Transfer Farm-out Arrangements Determination 2022.","sortOrder":0},{"sectionNumber":"2","sectionType":"part","heading":"Commencement","content":"## 2 Commencement\n\nThis determination commences on the day after it is registered on the Federal Register of Legislation.","sortOrder":1},{"sectionNumber":"3","sectionType":"part","heading":"Application","content":"## 3 Application\n\n    (1) This determination applies where a farmor and a farmee have entered into a deferred transfer farm-out arrangement:\n\n(a) to which the A New Tax System (Goods and Services Tax) (Particular Attribution Rules Where Supply or Acquisition Made Under a Contract Subject to Preconditions) Determination 2012 (F2012L00866) applied; or\n\n(b) on or after the date of commencement of this determination.","sortOrder":2},{"sectionNumber":"4","sectionType":"part","heading":"Attribution rules for a deferred farm-out arrangement","content":"## 4 Attribution rules for a deferred farm-out arrangement\n\n    (1) The attribution rules for a farmor that has entered into a deferred transfer farm-out arrangement are as follows:\n\n(a) If the farmor accounts for GST on a basis other than cash, GST payable on a taxable supply of an interest in the mining tenement is attributable to the tax period in which the farmee exercises the right to acquire the interest.\n\n(b) If the farmor accounts for GST on a cash basis, GST payable on a taxable supply of an interest in the mining tenement is attributable to the tax period in which the interest is transferred to the extent that the consideration received for that supply is the exploration benefit.\n\nNote: If the farmor accounts for GST on a cash basis and the consideration received is cash, the basic attribution rules in Division 29 of the GST Act apply.\n\n(c) The tax period determined under paragraph (a) or (b) applies instead of the tax period determined under subsection 29-5(1) or (2) of the GST Act, respectively.\n\n(d) To avoid any doubt, the basic attribution rules in Division 29 of the GST Act otherwise apply to the farmor.\n\n    (2) The attribution rules for a farmee that has entered into a deferred transfer farm-out arrangement are as follows:\n\n(a) If the farmee accounts for GST on a basis other than cash, the input tax credit for a creditable acquisition of an interest in the mining tenement is attributable to the tax period in which the farmee exercises the right to acquire that interest.\n\n(b) If the farmee accounts for GST on a cash basis, the input tax credit for a creditable acquisition of an interest in the mining tenement is attributable to the tax period in which the farmee exercises the right to acquire that interest to the extent of any consideration provided in that tax period or an earlier tax period for that acquisition.\n\n(c) The tax period determined under paragraph (a) or (b) applies instead of the tax period determined under subsection 29-10(1) or (2) of the GST Act, respectively.\n\n(d) To avoid any doubt, the basic attribution rules in Division 29 of the GST Act otherwise apply to the farmee.","sortOrder":3},{"sectionNumber":"5","sectionType":"part","heading":"Definitions","content":"## 5 Definitions\n\n(1) In this determination:\n\n    deferred transfer farm-out arrangement means an arrangement for the transfer of a percentage interest in a mining tenement from a farmor to a farmee, under which:\n    (a) the farmor provides the farmee with a right to acquire the interest in the mining tenement if the farmee meets all of its exploration commitments and any payment requirements to earn that interest (the earn-in requirements) within a specified period of time (the earn-in period);\n    (b) most or all of the exploration commitments to earn that interest are at the discretion of the farmee;\n    (c) the farmor grants to the farmee a right to exclusive use and access of the mining tenement to carry out the exploration commitments;\n    (d) there is a provision of an exploration benefit by the farmee to the farmor;\n    (e) the farmor will transfer the interest to the farmee at the end of the earn-in period if:\n    i) the farmee satisfies the earn-in requirements in the earn-in period;\n    ii) the farmee exercises the right to acquire the interest; and\n    iii) all necessary government approvals are granted.\n\n    exploration benefit means the benefit that flows to the farmor from the farmee’s exploration commitments, which is consideration (or part of the consideration) for the supply of an interest in the mining tenement by the farmor under a deferred transfer farm-out arrangement.\n    farmor means the owner of an interest in a mining tenement, who enters into a deferred transfer farm-out arrangement with a farmee.\n    farmee means the party entering into the deferred transfer farm-out arrangement with the farmor.\n\n(2) Other expressions in this legislative instrument that are defined in the GST Act have the same meaning as in that Act.","sortOrder":4},{"sectionNumber":"6","sectionType":"part","heading":"Repeal","content":"## 6 Repeal\n\nThe instrument that is specified in Schedule 1 to this instrument is repealed.","sortOrder":5},{"sectionNumber":"Schedule 1","sectionType":"part","heading":null,"content":"# Schedule 1\n\nA New Tax System (Goods and Services Tax) (Particular Attribution Rules Where Supply or Acquisition Made Under a Contract Subject to Preconditions) Determination 2012 (F2012L00866).","sortOrder":6}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"The legislation maintains its original narrow scope. It replaces the 2012 Determination with updated attribution rules specifically for deferred transfer farm-out arrangements, without expanding into other types of mining transactions or broader GST timing issues."},"complexity_factors":["Requires understanding of the distinction between cash basis and non-cash basis accounting for GST (two separate rule sets in sections 4(1) and 4(2))","Cross-references to Division 29 of the GST Act (A New Tax System (Goods and Services Tax) Act 1999) for basic attribution rules","Nested conditional logic: the definition of 'deferred transfer farm-out arrangement' contains 5 separate criteria (a)-(e), with sub-criteria (i)-(iii) under element (e)","Specialised industry terminology requiring definitions: 'farmor', 'farmee', 'mining tenement', 'exploration benefit', 'earn-in requirements', 'earn-in period'","Interaction with prior instrument (repeal of 2012 Determination) creates historical context dependency","Subtle distinction between 'exercise of right to acquire' vs 'transfer of interest' vs 'provision of exploration benefit' as triggering events"],"plain_english_summary":"This Determination fixes GST timing for \"deferred transfer farm‑out\" mining deals where a farmor grants exploration rights and the farmee only acquires an interest later if conditions are met. It says the farmor accounts for GST when the farmee exercises the acquisition right, and the farmee may claim the corresponding input tax credit in that same period. Different treatment applies if parties use cash versus accrual GST accounting, and the instrument replaces the 2012 Determination."},"flash_summary":{"complexity_score":5,"scope_assessment":{"changed":true,"description":"This instrument repeals the 2012 particular‑attribution determination (Schedule 1) and replaces it with specific attribution rules for deferred transfer farm‑out arrangements. It applies to arrangements that the 2012 instrument applied to and to arrangements entered into on or after commencement (s3, Schedule 1), thereby replacing and confirming application for both previously‑covered and future farm‑outs."},"complexity_factors":["Specialised subject matter: applies only to deferred transfer farm‑out arrangements with a multi‑element definition (s5(1)).","Conditional attribution tied to accounting method (cash vs non‑cash) for both farmor and farmee (s4(1)(a)‑(b), s4(2)(a)‑(b)).","Interaction with existing basic attribution rules in Division 29 of the GST Act and specific subsections (s4(1)(c)‑(d), s4(2)(c)‑(d)).","Partial attribution language (‘to the extent’ where consideration equals exploration benefit) creates allocation and measurement tasks (s4(1)(b), s4(2)(b)).","Reliance on factual triggers: exercise of right, transfer, provision of consideration, and grant of government approvals (s5(1)(a),(e)).","Repeal and replacement of an earlier 2012 determination introduces transitional/coverage questions (Schedule 1 and s3).","Compliance burden: parties must identify the exploration benefit portion of consideration and monitor tax periods and earn‑in milestones (s4, s5).","Potential for interpretation issues over when consideration is ‘the exploration benefit’ and what counts as ‘most or all’ exploration commitments (s5(1)(a),(b), definition of exploration benefit)."],"plain_english_summary":"This determination sets when GST is treated as payable or claimable for ‘deferred transfer farm‑out’ mining arrangements. It tells farmors (current tenement holders) and farmees (earn‑in parties) whether GST or input tax credits arise on exercise of the right, on transfer, or when consideration (the “exploration benefit”) is provided, depending on each party’s GST accounting method. The rule changes cash‑flow timing and tax reporting for parties to such farm‑outs and replaces the earlier 2012 particular‑attribution instrument."},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/a-new-tax-system-goods-and-services-tax-attribution-rules-for-deferred-transfer-farm-out-arrangement","history":"/api/acts/a-new-tax-system-goods-and-services-tax-attribution-rules-for-deferred-transfer-farm-out-arrangement/history","analysis":"/api/acts/a-new-tax-system-goods-and-services-tax-attribution-rules-for-deferred-transfer-farm-out-arrangement/analysis","conflicts":"/api/acts/a-new-tax-system-goods-and-services-tax-attribution-rules-for-deferred-transfer-farm-out-arrangement/conflicts","importantCases":"/api/acts/a-new-tax-system-goods-and-services-tax-attribution-rules-for-deferred-transfer-farm-out-arrangement/important-cases","documents":"/api/acts/a-new-tax-system-goods-and-services-tax-attribution-rules-for-deferred-transfer-farm-out-arrangement/documents"}}