Private ruling: GST and attribution of an input tax credit
Published: February 2015

Ruling: Q1: To which period do you attribute the input tax credit for your payment of $xxxx plus GST? | A1: Provided you hold a valid tax invoice, you will attribute the input tax credit to the tax period in which you made the payment.

Relevant facts and circumstances: You are registered for GST. You report quarterly on an accruals basis. You lease your premises from Entity B. You have renewed your lease for a ten year period commencing ddmmyyyy. Under the lease agreement, annual rental is $xxx (payable monthly in advance). Under Clause xx, you were required to pay an additional amount of $xxxx plus GST. You have paid this amount. Under Clause xy, the Landlord acknowledges that this represents a pre-payment of rent payable under the lease in addition to the annual rent payable. (The prepayment was made to assist the Landlord to pay out its loan on the property).

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 29-10 | A New Tax System (Goods and Services Tax) Act 1999 section 156-10

Reasons for decision: Summary: Note: In this ruling, unless otherwise stated, • all legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) • all reference materials referred to are available on the Australian Taxation Office (ATO) website www.ato.gov.au Under section 156-10, the input tax credit on a creditable acquisition that is made: • for a period or on a progressive basis; and • for consideration that is to be provided on a progressive or periodic basis; is attributed, in accordance with section 29-10, as if each progressive or periodic component of the acquisition were a separate acquisition. Paragraph 58 of Goods and Services Tax Ruling GSTR 2000/35 Goods and services tax: Division 156 - supplies and acquisitions made on a progressive or periodic basis states that a supply or acquisition by way of lease is treated as a periodic or progressive supply or acquisition to which Division 156 applies. On the facts supplied, your acquisition of the lease is a creditable acquisition. Therefore, you will attribute the input tax credits on the lease payments in accordance with section 29-10. Under paragraph 29-10(1)(a) you attribute the input tax credits to: • the tax period in which you provide any of the consideration for the acquisition, or • if, prior to providing any consideration, you receive an invoice relating to the acquisition - the tax period in which the invoice is received. Your payment of $xxxx plus GST is payment for multiple lease periods, each of which is treated as a separate supply. In accordance with paragraph 29-10(1)(a), you will attribute the input tax credits to the tax period in which you made the payment.