This determination prescribes special GST attribution timing rules for a particular commercial structure, a deferred transfer farm-out arrangement, altering when GST is treated as payable by a farmor and when an input tax credit is attributable to a farmee. The determination takes effect the day after registration (s 2). It applies to two sets of arrangements: those to which the 2012 determination (A New Tax System (GST) (Particular Attribution Rules Where Supply or Acquisition Made Under a Contract Subject to Preconditions) Determination 2012) applied, and any deferred transfer farm-out arrangements entered into on or after this instrument’s commencement (s 3).

Mechanically, the instrument replaces the default tax-period attribution rules in Division 29 of the GST Act for these specific farm-out arrangements by specifying alternative attribution points (s 4(1)(c), s 4(2)(c)). For a farmor who does not account on a cash basis, GST is attributable to the tax period in which the farmee exercises the right to acquire the interest in the mining tenement (s 4(1)(a)). For a farmee who does not account on a cash basis, the input tax credit for a creditable acquisition is attributable to the tax period in which the farmee exercises the right to acquire the interest (s 4(2)(a)).

Where either party accounts on a cash basis the instrument differentiates treatment. A farmor that accounts on a cash basis attributes GST payable on the taxable supply of the interest in the mining tenement to the tax period in which the interest is transferred, but only to the extent that the consideration received for that supply is the exploration benefit (s 4(1)(b)). A farmee that accounts on a cash basis attributes the input tax credit to the tax period in which the farmee exercises the right to acquire the interest, to the extent of any consideration provided in that tax period or an earlier tax period for that acquisition (s 4(2)(b)). A specific note in the instrument states that if a farmor accounts on a cash basis and the consideration received is cash, the basic attribution rules in Division 29 of the GST Act apply (s 4(1) note).

The instrument defines the key terms used for these rules, including the constituent features of a deferred transfer farm-out arrangement and the concept of the exploration benefit (s 5). It also repeals the earlier 2012 determination (s 6 and Schedule 1).

The instrument turns on a small set of concepts defined in the text. The core is the “deferred transfer farm-out arrangement”, which has a specific elemental definition comprising a right to acquire, discretion over exploration commitments, exclusive access, provision of an exploration benefit, and transfer conditional on satisfying earn-in requirements and government approvals (s 5(1)). The required elements are:

• a right for the farmee to acquire a percentage interest if the farmee meets agreed earn-in requirements within an earn-in period (s 5(1)(a));
• most or all of the exploration commitments are at the farmee’s discretion (s 5(1)(b));
• the farmee has exclusive use and access to carry out the exploration commitments (s 5(1)(c));
• there is a provision of an exploration benefit from the farmee to the farmor, which is consideration or part-consideration for the supply (s 5(1)(d) and s 5(2) definition); and
• the farmor will transfer the interest at the end of the earn-in period if the farmee satisfies the earn-in requirements, exercises the right, and necessary government approvals are granted (s 5(1)(e)(i)-(iii)).

“Exploration benefit” is defined narrowly as the benefit flowing to the farmor from the farmee’s exploration commitments and treated as consideration, or part of the consideration, for the supply of an interest under the arrangement (s 5(2)). This links the taxable supply and the consideration to the commercial performance of exploration obligations by the farmee.

Attribution timing is the other principal concept. Attribution determines the tax period in which GST payable arises for the supplier and the tax period in which an input tax credit is attributable for the recipient. The instrument substitutes specific attribution points for the farmor and farmee in deferred transfer farm-out arrangements (s 4(1)(a)-(b) and s 4(2)(a)-(b)). Where the party does not account on a cash basis the attribution point is the exercise by the farmee of the right to acquire (s 4(1)(a), s 4(2)(a)). For cash-basis accounting, the instrument narrows the attribution to the transfer date (for farmor, to the extent consideration is the exploration benefit) or to the exercise date limited to consideration provided in that period or earlier (for farmee) (s 4(1)(b), s 4(2)(b)).

The instrument operates by modifying only the tax-period determination in Division 29 of the GST Act, explicitly stating that the tax period determined under the specified paragraphs applies instead of the tax-period rules in subsection 29-5(1) or (2) for suppliers and subsection 29-10(1) or (2) for recipients (s 4(1)(c), s 4(2)(c)). The instrument also makes clear that the basic attribution rules in Division 29 otherwise continue to apply (s 4(1)(d), s 4(2)(d)). Finally, the instrument refers to the GST Act for other defined expressions (s 5(2)), signalling that existing GST definitions and framework remain relevant.

The instrument names two classes of private parties directly: a farmor and a farmee (s 5(1) definitions). The farmor is the current owner of the interest in a mining tenement who enters the deferred transfer farm-out arrangement; the farmee is the party acquiring the earn-in right (s 5(1)). The instrument’s attribution rules apply only where the parties’ arrangement meets the listed elements for a deferred transfer farm-out arrangement (s 5(1)). It also applies to arrangements previously governed by the 2012 determination and to arrangements entered into after commencement (s 3).

Accounting method is a determinative attribute for both parties. Whether a party accounts for GST on a cash basis or on another basis affects which attribution rule applies (s 4(1)(a)-(b); s 4(2)(a)-(b)). A supplier or recipient must therefore assess and record their taxation accounting method to apply the correct timing rules. The note in s 4(1) flags an additional distinction where a farmor accounts on a cash basis and the consideration received is cash; in that case the basic Division 29 attribution rules apply.

Tax advisers, accountants and compliance officers who prepare GST returns for parties to these arrangements are affected because the instrument changes the timing of GST liability and input tax credit attribution in some circumstances (s 4). The Australian Taxation Office and any state or territory revenue administration applying GST law will be involved, because the instrument operates within the GST legislative framework and affects reporting obligations for returns and credits. The broader mining sector, including joint ventures and corporate treasuries that structure earn-in arrangements, will need to identify whether existing or proposed contracts meet the specified definition (s 5(1)).

Finally, the instrument has a temporal scope that affects arrangements entered after commencement and pre-existing arrangements to which the 2012 determination applied (s 3). Parties to existing farm-out arrangements must check whether the 2012 instrument had applied to them, because the new determination now applies in its stead where relevant (s 6 and Schedule 1).

The principal duties created or clarified by the determination are duties to attribute GST payable and input tax credits to specific tax periods for the farmor and farmee, subject to the accounting method and the composition of the consideration (s 4). These duties are allocation duties rather than the imposition of new taxes or penalties.

For the farmor:

• If not accounting on a cash basis, the farmor must attribute GST payable on the taxable supply of the interest in the mining tenement to the tax period in which the farmee exercises the right to acquire the interest (s 4(1)(a)). That makes the farmor’s GST liability responsive to the farmee’s exercise event.
• If accounting on a cash basis, the farmor must attribute GST payable to the tax period in which the interest is transferred, but only for that portion of the consideration that is the exploration benefit (s 4(1)(b)). The instrument notes that if the farmor is cash-based and the consideration received is cash, Division 29’s basic attribution rules apply (s 4(1) note).
• The tax period determined under these specific paragraphs supersedes the tax period that would otherwise be set by subsection 29-5(1) or (2) of the GST Act (s 4(1)(c)). Otherwise the standard Division 29 rules remain applicable (s 4(1)(d)).

For the farmee:

• If not accounting on a cash basis, the farmee must attribute the input tax credit for a creditable acquisition of the interest to the tax period in which it exercises the right to acquire the interest (s 4(2)(a)). This aligns the recipient’s entitlement to claim an input tax credit with the exercise event when not on a cash basis.
• If accounting on a cash basis, the farmee attributes the input tax credit to the tax period in which it exercises the right to acquire the interest to the extent of any consideration provided in that tax period or an earlier tax period for that acquisition (s 4(2)(b)). This imposes a limitation on the timing of recovery for cash-basis farmees, tied to actual consideration provided.
• The tax period determined under these paragraphs replaces the tax period otherwise determined under subsection 29-10(1) or (2) of the GST Act (s 4(2)(c)). In other respects Division 29 applies (s 4(2)(d)).

Operationally, these duties create record-keeping and apportionment obligations. The instrument requires parties to identify the exploration benefit within the consideration and, where applicable, determine the portion of consideration that is attributable to that exploration benefit (s 5(2) definition and s 4(1)(b)). Parties must also monitor and record the exercise of the right to acquire, the date of transfer, timing and nature of payments or benefits provided, and whether necessary government approvals have been obtained (s 5(1)(e)(iii)). These facts determine the tax-period attribution under the instrument.

The legislative instrument itself does not specify penalties or an enforcement regime. It sets attribution rules and cross-references Division 29 of the GST Act for matters that remain governed by the Act (s 4(1)(d); s 4(2)(d)). The instrument does not amend or restate enforcement provisions, penalty scales, interest charges or administrative procedures contained in the GST Act or other tax laws.

Because the instrument alters the tax-period attribution for GST payable and input tax credits in the specified circumstances, non-compliance with its attribution rules would be a compliance matter under the GST Act. The instrument does not create a separate civil or criminal penalty regime. Any interest, penalties, assessments or reviews that arise from incorrect attribution of GST or incorrect input tax credit claims would therefore be pursued under the general GST legal framework rather than under this instrument. The instrument’s repeal of the earlier 2012 determination (s 6 and Schedule 1) likewise contains no transitional penalty provisions.

Practically, enforcement and penalty risk arises where a party attributes GST or claims input tax credits in a tax period inconsistent with the attribution rules in s 4 for an arrangement that meets the definition in s 5. That assessment of consistency will require factual evidence such as the exercise notice, transfer documentation, records of consideration (cash and non-cash), and documentation of the exploration commitments and whether they were at the farmee’s discretion (s 5(1)). The instrument signals that matters not dealt with by its specific paragraphs revert to the Division 29 framework, which is where any enforcement or penalties will be located.

Users should therefore plan on applying the instrument’s timing rules when preparing GST returns and on engaging with the administrative and compliance processes under the GST Act if disputes or corrections arise. The instrument itself does not provide dispute resolution procedures or penalty remissions.

This instrument functions within the GST legislative architecture; it does not amend the GST Act’s substantive provisions but prescribes attribution timing for a defined factual scenario under that framework. It does so by specifying alternative tax-period determinations that apply instead of the tax-period rules in Division 29 of the GST Act (s 4(1)(c); s 4(2)(c)). The instrument explicitly preserves the application of Division 29 for other matters (s 4(1)(d); s 4(2)(d)). The instrument also adopts GST Act definitions for other expressions not redefined within the instrument (s 5(2)).

The instrument directly repeals the earlier particular attribution-rules determination made in 2012 (Schedule 1; s 6). The application clause (s 3) ties the new instrument to the old: it applies to arrangements where the 2012 determination applied, or to arrangements entered into on or after commencement. That creates a bridged relationship: the new determination replaces the old for relevant pre-existing arrangements to which the 2012 instrument had applied, and it governs new arrangements from commencement forward.

Because this is a legislative instrument made under the GST statutory framework, it interacts indirectly with other tax laws and administrative processes, such as income tax reporting or state mining tenement registration regimes, to the extent that records or events in those domains (for example, transfer dates or approvals) affect attribution under this instrument (s 5(1)(e)(iii)). The instrument makes transfer of the interest conditional on government approvals within its definition of the farm-out arrangement (s 5(1)(e)(iii)), which may mean that approvals from non-tax agencies,mining regulators, state departments,are relevant to the timing of GST attribution.

The instrument does not displace other statutory regimes; it operates as a specialised attribution rule within the GST framework. It does not, on its face, alter the substantive law of supply, the determination of taxable supplies or acquisitions, or the existence of creditable acquisitions beyond the timing of attribution. It also does not expand or limit other tax assessments, audits, or review powers that derive from the GST Act rather than from this instrument.

Finally, the instrument’s definition-based approach creates a points-of-contact with contract law. Whether a particular contractual suite constitutes a “deferred transfer farm-out arrangement” for GST attribution purposes will depend on factual construction of the contract’s earn-in obligations, discretions, access rights, and consideration arrangements (s 5). That factual construction will be influenced by contract law and might involve the courts if disputed, but the instrument itself does not set out rules of contractual interpretation.

This instrument contains its own commencement clause and an express repeal of the prior particular attribution-rules determination. It commences the day after registration on the Federal Register of Legislation (s 2). The instrument repeals 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, identified in Schedule 1 (s 6; Schedule 1).

There are no further amendments recorded within the instrument text. The instrument’s application clause (s 3) indicates its temporal scope with respect to prior instruments: it applies to arrangements where the 2012 determination applied, or to arrangements entered into on or after this instrument’s date of commencement. Accordingly, the instrument functions as a replacement for the 2012 instrument for covered arrangements.

The instrument does not set out transitional provisions beyond its application clause. It does not specify transitional accounting mechanics for arrangements that straddle the commencement date, other than the two categories in s 3. It does not record consequential amendments to the GST Act or to other legislative instruments, nor does it identify any delegations, consultation history, or staged implementation. Any practical transitional questions,such as how to treat returns spanning the commencement date, or how to reconcile attributions previously made under the 2012 determination,are not addressed within the instrument and would need to be resolved by reference to the GST Act, guidance issued by the Commissioner, or professional advice.

No amending instruments are listed within the text. The only legislative history visible inside the instrument is the express repeal of the 2012 determination contained in Schedule 1. The instrument does not state the date of registration; therefore the commencement date must be calculated as the day after registration in the Federal Register of Legislation as provided by s 2.

The instrument does not include or refer to any litigation history. It contains no footnotes or annotations that record judicial consideration, nor does it reference any court decisions. The only prior instrument it replaces is specified in Schedule 1 (the 2012 determination), but no litigation relating to that instrument or to this instrument is recorded within the text.

Because the instrument is a legislative determination operating within the GST Act’s framework, disputes about its application would arise under the GST Act or in contract-related litigation if parties contest whether an arrangement meets the s 5(1) definition. The instrument itself records no case law, judicial interpretations, or complaints. Any litigated issues about whether a fact pattern constitutes a deferred transfer farm-out arrangement, how to identify the exploration benefit, or the correct tax period for attribution would need to be resolved through the GST Act procedures and, if contested, by engagement with tribunals or courts. Such litigation, if it occurs, is not documented in the instrument provided.

Practitioners should therefore treat the instrument as a source of statutory attribution rules and should not assume that any interpretive precedent exists beyond what the text says. Where the facts are borderline,particularly on the “most or all” test for exploration commitments at the farmee’s discretion, or the determination of the exploration benefit,parties should plan for potential interpretive disputes and the need to rely on administrative rulings or, if necessary, litigation, none of which are referenced in the instrument itself.

Several practical and drafting features of the instrument can produce unexpected outcomes if overlooked.

1. Attribution anchored to the farmee’s exercise, not transfer, in many cases. For non-cash accounting parties, both the farmor and the farmee attribute GST or input tax credits to the tax period in which the farmee exercises the right to acquire the interest (s 4(1)(a); s 4(2)(a)). This means the farmor may be required to account for GST before any transfer occurs and potentially before consideration has been paid or received. The farmor must therefore track the farmee’s exercise event carefully.

2. Different triggers depending on accounting basis. The instrument distinguishes the tax-period trigger by accounting method. For a farmor who accounts on a cash basis the attribution point is the transfer date, but only to the extent that the consideration received is the exploration benefit (s 4(1)(b)). For a cash-basis farmee, the input tax credit is attributable when the right is exercised, but only to the extent of consideration provided in that tax period or earlier (s 4(2)(b)). The asymmetry between exercise and transfer dates introduces timing mismatch risks, producing temporary misalignment between supplier liability and recipient credit if the parties use different accounting methods.

3. The “exploration benefit” requires apportionment evidence. The instrument treats the exploration benefit as consideration, or part of consideration, flowing from the farmee’s exploration commitments (s 5(2)). In mixed-consideration cases,where some consideration is cash and some is in services or expenditures,the farmor must identify which portion of the consideration is the exploration benefit and apply s 4(1)(b) accordingly. That raises apportionment and valuation questions which the instrument does not address.

4. A specific note changes the outcome where farmor is cash-based and consideration is cash. If the farmor is cash-based and the consideration received is cash, the Division 29 basic attribution rules apply rather than the special rule in s 4(1)(b). Practitioners must not assume s 4(1)(b) applies whenever the farmor is cash-based; the nature of the consideration (cash versus exploration benefit) matters (s 4(1) note).

5. The definition of the arrangement is factually specific. The farm-out must include most or all exploration commitments at the farmee’s discretion, exclusive use and access for the farmee, a right to acquire, and a provision of an exploration benefit (s 5(1)(a)-(d)). If a contract lacks one of these elements, the instrument will not apply and Division 29 will govern attribution. Parties cannot rely on the new rules by contract alone if the factual operation of the arrangement does not match the definition.

Compliance under this instrument requires a sequence of factual and accounting determinations and documentary practices.

1. Confirm the arrangement fits the statutory definition. The first compliance task is a factual assessment against the elements in s 5(1). Document that the arrangement: grants a right to acquire an interest conditional on earn-in requirements and an earn-in period (s 5(1)(a)); places most or all exploration commitments at the farmee’s discretion (s 5(1)(b)); grants exclusive use and access to the farmee (s 5(1)(c)); includes an exploration benefit (s 5(1)(d)); and contemplates transfer subject to the earn-in conditions and government approvals (s 5(1)(e)). If any element is absent, Division 29 timing rules apply instead.

2. Determine each party’s GST accounting basis. Identify whether the farmor and the farmee account for GST on a cash basis or another basis. The applicable attribution rule differs by accounting basis (s 4(1)(a)-(b); s 4(2)(a)-(b)). Integrate this determination into your GST-return calendar.

3. Establish and document the exploration benefit. If consideration is mixed or non-cash, prepare an apportionment methodology that identifies the portion constituting the exploration benefit as defined in s 5(2). Record the basis for valuation and allocation. This documentation will be required to apply s 4(1)(b) where the farmor is cash-based, and for overall compliance.

4. Track the exercise event and transfer event. Maintain contemporaneous records of any notice or act by which the farmee exercises the right to acquire the interest. For farmors not on a cash basis and for farmees not on a cash basis, the tax period for GST/income credit is the period in which exercise occurs (s 4(1)(a); s 4(2)(a)). For farmors on a cash basis, the relevant date may instead be the date of transfer (s 4(1)(b)). Establish procedures to capture and time-stamp these events.

5. Monitor government approvals. Because transfer can be conditional on necessary government approvals (s 5(1)(e)(iii)), record the dates of any approvals or refusals. The presence or absence of approvals can affect whether a transfer actually occurs and thus affect attribution in cash-basis cases.

6. Apply the substitution rules to tax-period calculations. When preparing GST returns, apply the tax periods as substituted by the instrument where it applies; those substituted tax periods replace those in subsection 29-5(1) or (2) for suppliers (s 4(1)(c)) and in subsection 29-10(1) or (2) for recipients (s 4(2)(c)). Ensure the accounting system and GST return software can reflect these substituted timing rules.