A New Tax System (Goods and Services Tax) Attribution Rules for Deferred Transfer Farm-out Arrangements Determination 2022
4Attribution rules for a deferred farm-out arrangement
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4 Attribution rules for a deferred farm-out arrangement
(1) The attribution rules for a farmor that has entered into a deferred transfer farm-out arrangement are as follows:
(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.
(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.
Note: 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.
(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.
(d) To avoid any doubt, the basic attribution rules in Division 29 of the GST Act otherwise apply to the farmor.
(2) The attribution rules for a farmee that has entered into a deferred transfer farm-out arrangement are as follows:
(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.
(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.
(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.
(d) To avoid any doubt, the basic attribution rules in Division 29 of the GST Act otherwise apply to the farmee.