Goods and Services Tax: (Particular Attribution Rules for Cooling off Periods) Determination 2017

The determination rests on a small set of core concepts, each defined or referred to in the instrument and grounded in the GST Act by paragraph 8. First, the triggering fact is that a taxable supply or a creditable acquisition has been made but is subject to a statutory cooling off period under an Australian law, as set out in paragraph 4. The instrument therefore applies only to cooling off periods that are statutory in source, not to contractual or voluntary cooling off arrangements; the term "statutory cooling off period" is used throughout and its scope will be governed by the GST Act definitions and relevant Australian laws, because expressions have the same meaning as in the GST Act, per paragraph 8.

Second, the determination uses the notion of attribution of GST payable on supplies and attribution of input tax credits for acquisitions. For supplies, paragraph 5 refers repeatedly to "the GST payable on the supply is attributable to" specified tax periods. For acquisitions, paragraph 6 uses parallel language for "the input tax credit to which you are entitled for the acquisition is attributable to" specified tax periods. Attribution in both cases is therefore a timing rule, directing when the monetary amounts must be treated as belonging in particular tax periods for GST accounting purposes.

Third, the instrument distinguishes between entities that "account on a cash basis" and those that do not, and prescribes different attribution mechanics for each. For non-cash-basis taxpayers, the default attribution is to the earlier of the tax period in which any consideration is received or the tax period in which an invoice is issued, paragraphs 5(a) and 6(a). For cash-basis taxpayers, attribution follows receipt or provision of consideration in the tax period in which it is received or provided, paragraphs 5(c) and 6(c), with partial receipt considered pro rata to the extent received in that tax period.

Fourth, the unique overlay is the cooling off override. Where the earlier attribution determined under the general rule would fall to a tax period that ends before the cooling off period expires, paragraphs 5(b) and 5(d) for supplies and 6(b) and 6(d) for acquisitions require that the GST payable or input tax credit be attributed instead to the tax period in which the cooling off period expires. Thus the cooling off period functions as a timing lock which can push a GST attribution forward to a later tax period.

Fifth, the instrument is explicit about its intended relationship to other provisions: paragraph 7 says it is not intended to override subsection 29-10(3) or Division 156 of the GST Act. Paragraph 8 reiterates that expressions have the meanings given in the GST Act, anchoring interpretative questions to that primary legislation.

Collectively, these concepts create a framework where the statutory existence and the expiry date of a cooling off period interact with receipt, provision of consideration and invoice issuance, and with the taxpayer’s basis of GST accounting, to determine the correct tax period for GST or input tax credit attribution.

The determination targets two principal groups of taxpayers: suppliers who make taxable supplies that are subject to a statutory cooling off period, and recipients who make creditable acquisitions that are subject to such a period. Paragraph 4 states the scope: it applies where "a taxable supply or creditable acquisition has been made, but it is subject to a statutory cooling off period". The instrument therefore affects entities on both sides of transactions that meet that condition.

Within those groups it distinguishes between entities that account on a cash basis and those that do not. Paragraphs 5 and 6 provide separate attribution rules depending on the accounting method, so the determination affects record-keeping and reporting practices differently for cash-basis taxpayers versus accrual-basis taxpayers. Entities that account on a cash basis will attribute GST and input tax credits on the basis of receipt or provision of consideration (paragraphs 5(c) and 6(c)), while non-cash-basis entities will apply the earlier-of invoice or consideration rule (paragraphs 5(a) and 6(a)).

The "statutory cooling off period under an Australian law" qualifier in paragraph 4 narrows the affected cohort to transactions governed by an Australian statutory regime that includes a cooling off right. Entities selling goods or services where cooling off rights are only contractual or arise under foreign law are outside the textual scope, unless the relevant cooling off right is a statutory right under an Australian law. Because paragraph 8 ties expressions to meanings in the GST Act, those trying to determine whether a particular transaction falls within the instrument must apply the GST Act definitions to identify whether the cooling off period is "statutory" for the purposes of the Act.

The instrument also implicitly affects tax advisers, accountants and compliance officers who must allocate GST and input tax credit entitlements among tax periods. Paragraph 4’s statement that entities which satisfied the previous determination will satisfy this one signals continuity for taxpayers already applying the older instrument, but taxpayers who enter into transactions with statutory cooling off periods must implement the attribution mechanics set out in paragraphs 5 and 6 for reporting.

Finally, although the determination is directed at taxpayers, it also affects the Australian Taxation Office by prescribing how the ATO expects GST attributable amounts to be timed in BAS and other reporting, given it is the Deputy Commissioner who made the determination under the delegated power in subsection 29-25(1) of the GST Act.

The instrument creates duties of timing for taxpayers in respect of GST payable and input tax credits for supplies and acquisitions subject to statutory cooling off periods. These duties are procedural and concern the correct attribution of amounts to tax periods.

For suppliers of taxable supplies, paragraph 5 imposes a duty to attribute GST payable to an appropriate tax period. If not on a cash basis, the supplier must attribute GST payable to the earlier of the tax period where any consideration is received or where an invoice is issued, per paragraph 5(a). However, paragraph 5(b) imposes a consequential duty to override that earlier attribution if it would fall to a tax period that ends before the cooling off period expires, by instead attributing GST to the tax period in which the cooling off period expires. If the supplier accounts on a cash basis, paragraph 5(c) requires attribution to the tax period in which consideration is received (all or part), and paragraph 5(d) again requires a shift to the tax period in which the cooling off period expires where attribution under the cash-basis rule would otherwise fall to an earlier- ending tax period.

For recipients of creditable acquisitions, paragraph 6 imposes an equivalent duty with respect to input tax credits. A recipient who does not account on a cash basis must attribute the input tax credit to the earlier of the tax period in which consideration is provided or an invoice is issued, paragraph 6(a), subject to the cooling off expiry override in paragraph 6(b). A cash-basis recipient attributes based on the provision of consideration in the tax period, paragraph 6(c), with paragraph 6(d) moving attribution to the tax period of cooling off expiry if necessary.

The instrument does not expressly create substantive rights beyond attribution timing. However, by specifying when input tax credits are to be attributed, paragraph 6 effectively governs the timing of an entity’s entitlement to claim those credits in a tax period. Similarly, paragraph 5 governs the timing of a supplier’s GST payable for reporting purposes.

Paragraph 4 creates a transitional or continuity reassurance: entities that satisfied the requirements of the previous determination and that make supplies or acquisitions subject to a statutory cooling off period will satisfy the requirements of this determination. This functions as a right of continuity for those taxpayers, avoiding a change in treatment for taxpayers who had been applying the previous instrument.

Paragraph 7 limits the instrument’s operation by stating it is not intended to override subsection 29-10(3) or Division 156 of the GST Act. The practical effect is that duties created by this determination must be read subject to those provisions of the Act; if those provisions impose separate duties, the determination does not purport to displace them.

Finally, paragraph 8 places a duty on users of the determination to use the meanings in the GST Act for expressions in the determination, which directs interpretive authority to the Act and requires attention to the statutory definitions in the GST Act when applying the determination.

The determination itself does not set out penalties or enforcement mechanisms. It is a delegated rule that prescribes how GST and input tax credits are to be attributed for tax periods; enforcement of GST obligations, and penalties for incorrect reporting or non-compliance, are administered under the GST Act and the broader taxation regime. The instrument expressly situates itself within the GST Act framework in a number of ways: it was made under subsection 29-25(1) of the GST Act, paragraph 7 signals it is not intended to override particular provisions of that Act, and paragraph 8 requires expressions to be read with the meanings in the GST Act. Those features indicate that enforcement and penalties for failing to comply with the attribution rules in the determination will be pursued under the GST Act’s compliance architecture rather than under the determination itself.

Because the determination alters timing for attribution of GST payable and input tax credits, non-compliance may manifest as incorrect reporting of GST liabilities or credit entitlements in Business Activity Statements or other returns. The ATO’s usual powers under the GST Act for assessments, adjustments, and compliance activity would therefore apply where taxpayers fail to apply the determination’s rules, but the determination does not itself specify penalty levels, administrative penalties, interest charges, or criminal sanctions.

Paragraph 7’s reservation that the determination is not intended to override subsection 29-10(3) or Division 156 is relevant to enforcement insofar as those parts of the GST Act may contain rules that affect liability or impose consequences. A taxpayer who attributes amounts in accordance with the determination but contrary to another provision of the GST Act could still face adjustment or penalty under the Act, depending on the application of those provisions. Conversely, the determination may be relied upon as an ATO-issued direction on attribution timing, and that formal source can be relevant in dispute resolution and administrative compliance contexts, because it is an instrument made by the Deputy Commissioner.

In practice, enforcement risk for affected taxpayers will be driven by the interaction between this determination’s timing rules and the mechanics of BAS reporting, and by how the ATO exercises its assessment and audit powers under the GST Act where discrepancies arise between reported positions and the ATO’s expectations. The determination does not alter the ATO’s existing legal powers, and does not prescribe any bespoke enforcement mechanism or penalty regime.

The determination is made under a specific power in the GST Act, subsection 29-25(1), and it explicitly instructs users to apply GST Act meanings, paragraph 8. Paragraph 7 states the determination is not intended to override subsection 29-10(3) or Division 156 of the GST Act. Those textual cross-references mean that the determination must be read as a tailored attribution rule operating within, and subordinate to, the broader statutory framework of the GST Act.

Operationally, the determination provides a particular attribution rule that modifies the ordinary attribution outcome in situations where a tax period would otherwise end before a statutory cooling off period expires. That modification is confined to timing, not substantive entitlement. The instrument does not purport to create or remove a taxable supply, or to change the fundamental liability rules in the GST Act; it changes when GST payable or input tax credits are attributable to tax periods, where a statutory cooling off period exists.

The requirement in paragraph 8 that expressions have the same meaning as in the GST Act means that terms such as "taxable supply", "creditable acquisition", "input tax credit", "account on a cash basis", "tax period" and "statutory cooling off period" are to be interpreted using the GST Act’s definitions. Any interactional issues, therefore, will turn on how those GST Act terms operate in specific circumstances. For example, whether a particular right is a statutory cooling off period for the purposes of this determination will be a question of law under the GST Act and any relevant Australian law conferring the cooling off right.

Paragraph 7’s non-override statement points to potential intersection with subsection 29-10(3) and Division 156. While the determination does not state the content of those parts, the express non-override wording indicates the delegated instrument is not intended to displace obligations, exceptions, adjustments, margin schemes, or other special attribution or acquisition rules that may sit in those provisions. Consequently, taxpayers must ensure the application of the determination is consistent with any rules in subsection 29-10(3) or Division 156 which might alter timing, entitlement, or special treatment of GST or input tax credits.

Because the determination repeals and replaces an earlier determination (paragraph 3) but assures continuity for entities that satisfied the earlier instrument (paragraph 4), there is an intended smoothness of interaction for taxpayers who had previously applied the repealed instrument. The determination therefore forms part of a chain of administrative guidance about attribution timing interacting with the statutory GST framework.

Finally, by restricting its scope to statutory cooling off periods under Australian law, the determination interacts with other Australian statutes that create cooling off rights. That interaction requires taxpayers to identify whether a cooling off period they consider relevant arises under an Australian statute or under some other source, because the determination’s rules apply only in the former case.

The instrument itself records a succinct amendment history. Paragraph 3 states that the determination repeals and replaces the earlier determination titled A New Tax System (Goods and Services Tax) (Particular Attribution Rules for Cooling off Periods) Determination (No. 1) 2000 , F2006B11605, which was registered on 20 November 2006. The new determination is signed and dated by the Deputy Commissioner of Taxation, and paragraph 4 confirms the new instrument is "substantially the same as the previous determination that it replaces."

Paragraph 2 records commencement: the determination commences on the day after its registration on the Federal Register of Legislation. The instrument does not specify an exact registration date within its text other than the signature date, but the commencement rule is explicitly forward-looking from registration.

Paragraph 4 provides a continuity clause: an entity that satisfied the requirements of the previous determination and that is an entity which makes a taxable supply or creditable acquisition subject to a statutory cooling off period will satisfy the requirements of the determination. That clause functions as an administrative bridge between the repealed instrument and the new instrument. It signals the intention that the legal effect for such entities remains intact despite the formal repeal and replacement, thereby avoiding a substantive change in treatment for taxpayers who had been complying with the earlier instrument.

No other amendments, variations, or historical versions are recorded within the determination itself. The instrument is focused and self-contained, replacing the prior named determination and asserting substantive continuity. The determination does not, within its text, set out transitional provisions beyond the continuity assurance in paragraph 4, nor does it state that it has retrospective effect. The commencement clause in paragraph 2 suggests it comes into force prospectively from registration; the continuity clause in paragraph 4 covers taxpayers who had been operating under the previous instrument.

The determination contains no record of litigation. It does not cite any cases, nor does it record judicial interpretation of its provisions. The instrument is an administrative determination; it does not state or assert any past court decisions bearing on its content.

Nevertheless, the determination contains a number of interpretative points that could in practice be the subject of dispute and therefore litigation under the GST Act. Paragraph 8 ties expressions to the GST Act, so questions about the scope of the instrument will convert into statutory interpretation issues under the GST Act. For example, whether a particular right is a "statutory cooling off period under an Australian law" could be contested and might require judicial determination if parties or the ATO disagree. The same is true for terms such as "account on a cash basis", "tax period", "invoice", or "consideration", which the determination imports from the GST Act and which can be the subject of dispute.

Paragraphs 5 and 6 create timing rules that can be fact-sensitive. Disputes could arise about the precise tax period in which consideration is "received" or "provided", the timing of invoice issuance, or the exact date a cooling off period expires. Those factual questions interact with legal constructions in the GST Act, making them potential litigation matters in the context of assessments, adjustments or penalty notices under the Act.

Paragraph 7 explicitly ensures the determination is not intended to override subsection 29-10(3) or Division 156 of the GST Act. That caveat flags another potential locus of dispute: if a taxpayer relies on the determination but the ATO asserts a contrary position under subsection 29-10(3) or Division 156, resolution could require formal interpretation of which provision governs the particular facts. Those sorts of priority and interaction questions are the type that have historically been subject to administrative review and, where contested, judicial determination.

While the instrument itself provides no litigation history, the interpretative touchpoints it creates, coupled with its reliance on definitions and provisions in the GST Act, provide the practical routes through which disputes could be litigated. The determination will therefore be relevant evidence of the ATO’s administrative approach to attribution timing in any such proceedings.

There are several practical pitfalls and interpretative traps that flow directly from the instrument’s language.

First, the instrument applies only where the supply or acquisition is subject to a statutory cooling off period under an Australian law, paragraph 4. This excludes cooling off periods that are merely contractual in origin or that arise under foreign law. Taxpayers who assume any cooling off right qualifies may be incorrect. The phrase "statutory cooling off period under an Australian law" therefore requires careful verification of the source of the right. Paragraph 8 mandates use of GST Act definitions, so disputes about whether a given right is "statutory" will be resolved by reference to statutory definitions and the underlying Australian law.

Second, the determination hinges on the exact tax period in which a tax period "ends" relative to the cooling off expiry, as the override in paragraphs 5(b) and 6(b) applies when the tax period that would otherwise carry the attribution "ends before the cooling off period expires". Determining whether a tax period "ends" before expiry may be straightforward for monthly or quarterly periods, but practical issues can arise where taxation accounting cycles overlap with contract dates, or where the cooling off expiry coincides with a period end. Taxpayers must identify the relevant tax period boundaries precisely when applying the override.

Third, the split between cash-basis and non-cash-basis accounting creates differing mechanics. For cash-basis taxpayers, attribution follows receipt or provision of consideration (paragraphs 5(c) and 6(c)), and partial receipts are attributed only to the extent they are received in that tax period. For non-cash-basis taxpayers, an invoice may trigger attribution even if no cash has moved, per paragraphs 5(a) and 6(a). That divergence can create mismatches between when a supplier must report GST and when a purchaser can claim input tax credits, with cash flow consequences and potential timing mismatches.

Fourth, invoice timing is consequential. Under paragraphs 5(a) and 6(a) invoices can be the event that triggers earlier attribution. Taxpayers who issue invoices promptly may inadvertently bring a supply into an earlier tax period unless they are aware of the cooling off override. Conversely, delaying invoice issuance may affect attribution and could create administrative or contractual tensions.

Fifth, the instrument provides no express guidance on partial or multiple cooling off periods, or on supplies or acquisitions that comprise multiple components with different cooling off constructs. The determination treats attribution on a supply-by-supply or acquisition-by-acquisition basis. Where a single transaction has multiple components with different cooling off rights, taxpayers will need to attribute each component separately to avoid incorrect reporting, with no explicit directions in the instrument on aggregation rules.

Sixth, paragraph 7’s non-override of subsection 29-10(3) and Division 156 means taxpayers cannot rely solely on this determination in situations where those parts of the GST Act apply. For example, if Division 156 contains special attribution rules or adjustments applicable to the transaction, those rules may still govern. The determination does not exhaustively spell out interaction principles, so taxpayers must perform a two-step compliance check: first apply the determination, and then confirm consistency with subsection 29-10(3) and Division 156.

Seventh, although paragraph 4 assures continuity for entities that satisfied the previous determination, the instrument does not set out transitional rules beyond that assurance. Taxpayers should not assume broad retrospective application or assume all prior administrative practices automatically survive; they must check documentation and ensure recording of cooling off expiry dates, invoices and receipts to sustain the claimed attribution.

Finally, record-keeping is a likely compliance choke point. The attribution rules require tracking the date and extent of consideration received or provided, invoice dates, the expiry date of statutory cooling off periods, and the taxpayer’s accounting basis, in order to determine the correct tax period for attribution. Failure to maintain accurate records aligning those dates to tax periods could lead to disputes or adjustments under the GST Act.

Applying the determination requires disciplined record-keeping and a clear decision process in each relevant transaction. The following steps translate the instrument’s provisions into actionable compliance items, with direct reference to the relevant paragraphs.

1. Identify whether a supply or acquisition is subject to a statutory cooling off period under an Australian law. Paragraph 4 is clear: the determination applies only in that circumstance. Use the GST Act definitions, as paragraph 8 requires, to determine whether the cooling off right is statutory.

2. Determine your accounting basis for GST. Paragraphs 5 and 6 bifurcate treatment between entities that "account on a cash basis" and those that do not. Confirm whether your entity is a cash-basis GST reporter, because the attribution mechanics differ materially.

3. For suppliers not on a cash basis, apply paragraph 5(a): attribute GST payable to the earlier of the tax period in which any consideration is received or the tax period in which an invoice is issued. For recipients not on a cash basis, apply paragraph 6(a): attribute the input tax credit to the earlier of the tax period in which you provide any consideration or the tax period in which an invoice is issued.

4. For cash-basis suppliers, apply paragraph 5(c): attribute GST to the tax period in which all or part of the consideration is received, with partial receipts attributed only to the extent received in that tax period. For cash-basis recipients, apply paragraph 6(c): attribute input tax credits to the tax period where consideration is provided, wholly or partially as applicable.

5. Apply the cooling off override. If the period identified under step 3 or 4 would end before the statutory cooling off period expires, paragraphs 5(b) and 5(d) for supplies, and paragraphs 6(b) and 6(d) for acquisitions, require that the relevant GST payable or input tax credit be attributed to the tax period in which the cooling off period expires. Practically, you must compare the end date of the relevant tax period to the expiry date of the cooling off right and defer attribution where the tax period ends before expiry.

6. Document each decision. At minimum, retain: the transaction record; the invoice date; the date or dates of receipt or provision of consideration; the exact statutory source that creates the cooling off right; the expiry date of the cooling off period; the taxpayer’s accounting basis; and a calculation showing how attribution was determined. Paragraph 8’s instruction to adopt GST Act meanings reinforces the need to align documentation with statutory definitions.

7. Reconcile BAS reporting. Ensure your Business Activity Statement entries for the relevant tax periods reflect the attribution determined under paragraphs 5 and 6. For suppliers, ensure GST payable is reported in the tax period attributed; for recipients, ensure input tax credits are claimed in the tax period attributed. If adjustments or corrections are needed because of earlier mis-attribution, follow the GST Act’s correction and amendment procedures.

8. Check for interactions with other GST Act provisions. Paragraph 7 cautions that the determination is not meant to override subsection 29-10(3) or Division 156. Before relying solely on this determination, confirm that those provisions do not impose an alternative timing or special treatment which must be applied.

9. For complex transactions, take a component approach. If a single invoice or contract has multiple deliverables with different statutory cooling off rules, attribute GST and input tax credits component-by-component in line with the instrument’s mechanics, and document the basis for each component’s attribution.

10. Seek advice where ambiguous. If there is doubt about whether a cooling off right is statutory, when it expires, or how to allocate partial receipts across tax periods, obtain professional advice or seek private binding advice from the ATO, because the determination itself does not resolve such factual or definitional questions.

By following these steps and maintaining clear contemporaneous records, taxpayers will implement the specific timing rules set out in this determination. The instrument’s clear allocation rules reduce ambiguity about whether to defer attribution when a cooling off period remains open, but they import reliance on GST Act definitions and require precise date-level compliance to avoid mis-attribution.