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Indirect tax sharing agreement – reasonable allocation of indirect tax law liability

Guidelines on the reasonable allocation of indirect tax law liability for GST groups.

Last updated 14 September 2026

A GST group may have an indirect tax sharing agreement (ITXSA) specifying the amounts each member contributes to the group's indirect tax law liabilities for a particular tax period. The ITXSA may specify:

  • fixed contribution amounts for each contributing member
  • a method of allocation under which contribution amounts are determined.

For either method, the contribution amounts calculated under the ITXSA must represent a 'reasonable allocation' of liabilities among the group's representative member and contributing members. For more information, see Paragraph 444-90(1A)(c) of Schedule 1 to the Taxation Administration Act 1953 (TAA).

Reasonable methods of allocation

There's no prescribed method that must be used to allocate a group's indirect tax law liability.

Other contractual arrangements

Groups may use an ITXSA for other purposes.

Arrangements to prejudice recovery

When a contributing member of a GST group may not be able to pay its full contribution amount.

Examples of reasonable allocation of indirect tax law liability under an ITXSA

Three examples of reasonable allocation.

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