LI 2026/5 - Explanatory Statement
A New Tax System (Goods and Services Tax) Act 1999
Explanatory Statement
A New Tax System (Goods and Services Tax) (Attribution Rules – Prepayment for a Telecommunication Supply) Determination 2026
General outline of instrument1. This instrument is made under subsection 29-25(1) of the A New Tax System (Goods and Services Tax) Act 1999 (the Act).
2. This instrument allows telecommunications providers to delay attribution of GST for certain telecommunication supplies (such as telephone, mobile or internet services) to the tax period in which an invoice is issued (or would have been issued) for the supply in cases where a prepayment for that supply has been received in an earlier tax period. It will prevent the basic GST attribution rules from applying inappropriately in these circumstances.
3. The instrument is a legislative instrument for the purposes of the Legislation Act 2003.
4. Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws) the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
Date of effect5. This instrument commences on the day after it is registered on the Federal Register of Legislation.
6. This instrument repeals and replaces the Goods and Services Tax: Particular Attribution Rules Determination (No. 28) 2016 for Prepayments of Telephone Services that would otherwise sunset on 1 April 2026. The instrument has the same substantive effect as the one it is replacing.
Background7. Division 29 of the Act sets out the basic attribution rules for attributing GST, input tax credits and adjustments to a tax period. There are also some attribution rules in Chapter 4 of the Act that affect the basic rules in Division 29 of the Act.
8. Under the basic attribution rules, a telecommunications provider that accounts on a non-cash basis and receives a prepayment for a telecommunication supply before they issue an invoice as part of their regular billing cycle, would need to attribute GST on that supply to the tax period in which the prepayment is received.
9. These prepayments may be made by the customer as either a deliberate or an unintentional early payment.
10. However, the application of the basic attribution rules would be inappropriate in these circumstances, and could result in:
- (a)
- GST being attributable to an earlier tax period than the one in which the customer actually uses or enjoys the telephone services that the prepayment relates to, and
- (b)
- the telecommunications provider potentially having to attribute GST for two periodic supplies of telephone services, to that customer, in the same tax period.
11. Section 29-25 of the Act allows the Commissioner to determine alternate tax periods to which GST, input tax credits and adjustments are attributable where it is necessary to prevent the basic attribution rules from applying in a way that is inappropriate in certain circumstances. These include circumstances under paragraph 29-25(2)(b) of the Act where a supply for which payment is made or an invoice is issued, but use, enjoyment or passing of title will, or may, occur at some time in the future.
Effect of this instrument12. This instrument alters some of the basic attribution rules in Division 29 of the Act for certain telecommunication supplies made by a telecommunications provider to ensure that the GST payable in relation to those supplies is attributable to the earlier of:
- (a)
- the tax period in which an invoice is issued in relation to the supply, and
- (b)
- the tax period in which an invoice would have been issued by the telecommunications provider in relation to the supply had the prepayment not been made.
13. However, this attribution rule only applies in circumstances where the supplier does not account on a cash basis.
14. Prepayment in the instrument means a payment made by a customer to a telecommunications provider for a taxable supply that is a telecommunication supply before the provider has issued an invoice for the supply as part of its regular billing cycle.
15. Telecommunications provider in the instrument means an entity that makes telecommunication supplies to the public for a fee. This would include telephone, mobile and internet service providers.
16. Telecommunication supply is defined in the Act to mean a supply relating to the transmission, emission or reception of signals, writing, images, sounds or information of any kind by wire, radio, optical or other electromagnetic systems. It includes:
- (a)
- the related transfer or assignment of the right to use capacity for such transmission, emission or reception, and
- (b)
- provision of access to global information networks.
This would include supplies of both voice and data services regardless of the medium of transmission.
Compliance cost assessment17. Compliance cost impact: Minor – There will be no additional regulatory impacts as the instrument is minor and machinery in nature (OIA25-10491).
Consultation18. Subsection 17(1) of the Legislation Act 2003 requires that the Commissioner is satisfied that appropriate and reasonably practicable consultation has been undertaken before they make a determination.
19. Public consultation was undertaken for a period of 4 weeks commencing 31 October 2025 on drafts of this instrument and explanatory statement.
20. The draft instrument and explanatory statement were published on the ATO Legal database and publicised on the database's 'What's new' and the Open Consultation page on the ATO website. Major tax and superannuation publishers and associations commonly monitor these pages and usually include the detail in the daily and weekly alerts and newsletters to their subscribers and members.
21. No feedback was received on the draft instrument and explanatory statement during the consultation period.
Statement of compatibility with human rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
A New Tax System (Goods and Services Tax) (Attribution Rules – Prepayment for a Telecommunication Supply) Determination 2026This legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the legislative instrumentThis legislative instrument alters some of the basic attribution rules in Division 29 of the A New Tax System (Goods and Services Tax) Act 1999 for a telecommunications provider making a telecommunication supply (such as telephone, mobile or internet services), where it receives a prepayment for that supply before an invoice is issued or would normally be issued as part of its regular billing cycle.
If the basic rules applied, GST would be required to be attributed to the tax period in which the prepayment was received, before the use or enjoyment of the service is provided to the customer.
This instrument allows telecommunications providers to delay attribution of GST for those telecommunication supplies to the tax period in which an invoice is issued (or would have been issued) rather than the tax period in which the prepayment for that supply is received.
Human rights implicationsThis legislative instrument does not engage any of the applicable rights or freedoms. It merely prevents the basic GST attribution rules from applying inappropriately in certain circumstances.
ConclusionThis legislative instrument is compatible with human rights as it does not raise any human rights issues.
25 February 2026
Will Day
Deputy Commissioner of Taxation
LI 2026/5 - Legislative Instrument