Private ruling: GST - support agreements
Date of advice: 2 June 2026
Published: 17 August 2026
Ruling period: 1 June 20YY to 30 June 20YY
Date scheme commenced: DD MM 20YY

Ruling: Q1: When entering into a support agreement are you: (a) making an input taxed financial supply to the other party under section 40-5 of the A New Tax System (Goods and Services Tax Act) 1999 (GST Act)? (b) making an input taxed acquisition-supply (financial supply) from the other party under section 40-5 of the GST Act? | A1: (a) Yes, you are making an input taxed financial supply. (b) Yes, you are making an input taxed acquisition-supply. | Q2: If you are making an input taxed financial supply are the payments made to you under the support agreement further consideration for that input taxed financial supply under subparagraph 40-5.09(1)(a)(i) of the GST Regulations? | A2: Yes, the payments made to you under the support agreement are further consideration for your input taxed financial supply of a provision of an interest in a derivative under subparagraph 40-5.09(1)(a)(i) of the GST Regulations. | Q3: If you are making an input taxed acquisition-supply (financial supply) under the support agreement, are the payments made by you to the other party further consideration for that input taxed financial acquisition-supply under subparagraph 40-5.09(1)(a)(i) of the GST Regulations? | A3: Yes. | Q4: Pursuant to the support agreement: (a) are you making a creditable acquisition of intangible products under section 11-5, and, if so are you entitled to the full input tax credit under section 11-25 in respect of the GST payable on the supply of the intangible products ? (b) If yes to (a) above, will this input tax credit be attributable entirely to the first tax period in which both the support agreement has been executed, and all conditions precedent have been satisfied/waived? | A4: (a) Yes, you are making a creditable acquisition. (b) Yes. | Q5: Are the additional payments made by you under the support agreement: (a) consideration for a supply by the other party and (b) if so, are they consideration for a creditable acquisition by you under section 11-5 of the GST Act? | A5: (a) No, the payments are not consideration for a supply. (b) Response not necessary.

Relevant facts and circumstances: You are registered for goods and services tax (GST). The other party to the arrangement is also registered for GST. You account for GST on a non-cash (accruals) basis. You will enter into a support agreement with the other party. There is a transfer of mutual obligations between you and the other party. You have an obligation to pay each other a sum of money if certain conditions are met. The other party is also required to supply specified intangible products to you under the terms of the support agreement. There is an additional payment made by you to the other party when certain conditions in the support agreement are met.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 paragraph 9-5(a) | A New Tax System (Goods and Services Tax) Act 1999 section 9-15 | A New Tax System (Goods and Services Tax) Act 1999 section 11-5 | A New Tax System (Goods and Services Tax) Act 1999 section 11-15 | A New Tax System (Goods and Services Tax) Act 1999 section 11-25 | A New Tax System (Goods and Services Tax) Act 1999 section 40-5 | A New Tax System (Goods and Services Tax) Regulations 2019 section 40-5.09 | A New Tax System (Goods and Services Tax) Regulations 2019 subsection 40-5.09(3)

Reasons for decision: Summary: Under section 9-5 of the GST Act, a supply is not a taxable supply to the extent that it is input taxed. Under subsection 40-5(1) of the GST Act, a financial supply is input taxed. Subsection 40-5(2) of the GST Act provides that financial supply has the meaning given by the GST Regulations. Section 40-5.09 of the GST Regulations sets out supplies that are financial supplies. A supply is a financial supply if there is the provision, acquisition or disposal of an interest mentioned in subsection 40-5.09(3) of the GST Regulations, and the other requirements of paragraphs 40-5.09(1)(a) and (b) of the GST Regulations are satisfied. Table item 11 of subsection 40-5.09(3) of the GST Regulations lists an interest in or under a derivative as an interest that can give rise to a financial supply. A derivative is defined in the dictionary of the GST Regulations to mean 'an agreement or instrument the value of which depends on, or is derived from, the value of assets or liabilities, an index or a rate'. In the context of supplies you may make under the support agreement, you meet the requirements in subsection 40-5.09(1) of the GST Regulations as they are made for consideration, in the course or furtherance of an enterprise, and are connected with Australia. You are registered for GST. There are no provisions in Division 38 of the GST Act under which the supply would be GST-free. It remains to be determined whether the supplies for consideration made by you under the support agreement are of an interest in a derivative, and whether you are a financial supply provider under subparagraph 40-5.09(1)(b)(ii) of the GST Regulations. Both you and the other party each make a supply of the provision of an interest in a derivative to each other. You both provide non-monetary consideration to the other party in the form of an interest under the derivative (paragraph 27 of Goods and Services Tax Determination 2005/3 Goods and services tax: are contracts for difference and financial spread betting contracts financial supplies? GSTD 2005/3). The payments which may be payable by either party are additional consideration for the supply of the interest in the derivative. Each party to the support agreement provides an interest in a derivative to the other - you and the other party are both financial supply providers in relation to the supply of the interest under subparagraph 40-5.09(1)(b)(ii) of the GST Regulations. All the requirements in section 40-5.09 of the GST Regulations are satisfied. Under the support agreement you make an input taxed financial supply of the provision of an interest in a derivative, and the consideration for that supply is: • the other party making an input taxed financial supply to you of the provision of an interest in a derivative. • any payments made by the other party to you; and • a supply of the transfer of intangible products to you (see Question 4). You also make a second financial supply, an input taxed acquisition-supply, when you acquire the interest in the derivative from the other party. The financial supply of the derivative by you is not overridden by section 40-5.12 of the GST Regulations, which excludes 'deliverable' derivatives from being financial supplies. When you enter into the support agreement with the other party you are making an: (a) input taxed financial supply under section 40-5 of the GST Act, and (b) input taxed acquisition-supply (financial supply) under section 40-5 of the GST Act. As discussed in Question 1, the payments made to you under the support agreements are additional monetary, consideration under subparagraph 40-5.09(1)(a)(i) of the GST Regulations for the input taxed financial supply of the provision of the interest in the derivative by you to the other party. As discussed in Question 1, the payments made by you under the support agreement are additional monetary consideration under subparagraph 40-5.09(1)(a)(i) of the GST Regulations for the input taxed acquisition-supply of the provision of the interest in the derivative by the other party to you. Under section 11-5 of the GST Act, there are four requirements that must be met to make a creditable acquisition: (a) you acquire anything solely or partly for a creditable purpose; (b) the supply of the thing to you is a taxable supply; (c) you provide, or are liable to provide, consideration for the supply; and (d) you are registered or required to be registered. Paragraph 11-5(b) of the GST Act provides that the supply of the intangible product to you must be a taxable supply. Under Section 9-5 of the GST Act, a taxable supply is made to you when the supply made by the other party: (a) is for consideration, (b) in the course or furtherance of an enterprise that they carry on, (c) connected with the indirect tax zone (Australia); and (d) the other party is registered or required to be registered. However, the supply is not a taxable supply to the extent it is GST free or input taxed. It is assumed, paragraphs 9-5 (b), (c) and (d) of the GST Act will be met by the other party. Therefore, we need to determine if the transfer of the intangible products to you is a supply for consideration as required by paragraph 9-5(a) of the GST Act. Under the support agreement, the other party is required to transfer intangible products to you. While the supply of the provision of an interest in a derivative is in itself a financial supply made by each party, under the support agreement each party enters into obligations under the derivative arrangement in exchange for the other party's corresponding obligations under the derivative arrangement, you additionally require that intangible products be supplied to you. The supply of intangible products by the other party is further non-monetary consideration for your financial supply of the provision of an interest in a derivative, in addition to the other party's supply of an interest in a derivative to you as detailed in paragraph 16 of Goods and Services Tax Ruling 2001/6 Goods and services tax: non-monetary consideration (GSTR 2001/6): 16. By providing non-monetary consideration for a supply, you are in turn making a supply. Where this happens, you need to determine the GST consequences of the supply you make. If it is a taxable supply, you need to determine the GST inclusive market value of the consideration you received for this supply to account for the GST payable. You may also be entitled to claim input tax credits for the supply made to you. Conversely, the other party makes a supply of the intangible products to you and the consideration for that supply is part of your input taxed financial supply of the interest in a derivative as well as the amounts payable as an additional GST amount under the support agreement. Therefore, paragraph 9-5(a) of the GST Act is met. As there are no provisions that would make the supply of the intangible products GST free or input taxed the supply to you is a taxable supply under section 9-5 of the GST Act. The consideration for the supply of intangible products to you is only 'part' of the interest in a derivative you supply, as its provided to the other party as consideration for two supplies and will need to be apportioned between those two supplies - as one supply is taxable (intangible product), and the other supply is input taxed (other party's supply of a derivative). Paragraph 135 of GSTR 2001/6 details the Commissioners view on the need to apportion the consideration between parts of the supply: Transaction involving no money 125. Where a single in kind payment is provided as consideration for a supply consisting of more than one identifiable part, you will need to apportion the consideration between the parts of the supply, if part of the supply is taxable and another part of the supply is GST-free, input taxed or otherwise non-taxable. The supply for consideration by the other party is the transfer of the intangible products by the other party to you, rather than the contractual obligation to transfer those rights upon entry into the support agreement. The consideration is 'for' the performance of the obligations (transfer of the intangible products), rather than the entry into the obligation to transfer. The fact that the quantum of the intangible products to be transferred is unknown upon entry into the support agreement does not mean that the relevant supply is the intangible product transfer obligation rather than the actual transfer of the intangible products. Creditable purpose The next requirement is whether you will acquire the intangible products solely or partly for a creditable purpose under paragraph 11-5(a) of the GST Act. Section 11-15 of the GST Act discusses the meaning of creditable purpose. Subsection 11-15(1) of the GST Act provides that you acquire a thing for a creditable purpose to the extent that you acquire it in carrying on your enterprise. Subsection 11-15(2) further provides that you do not acquire a thing for a creditable purpose to the extent that the acquisition relates to making supplies that would be input taxed or the acquisition is of a private or domestic nature. You will acquire the intangible products in carrying on your enterprise and subsection 11-15(1) of the GST Act will be satisfied. Paragraph 11-15(2)(a) of the GST Act specifically focuses on the relationship between an acquisition and the making of supplies that would be input taxed, by precluding an acquisition from being for a creditable purpose to the extent that it relates to the making of supplies that would be input taxed. Determining whether there is a relevant connection between an acquisition and the making of supplies that would be input taxed requires an objective assessment of the surrounding facts and circumstances to determine whether the acquisition is intended to be used in making those supplies. Paragraph 119 of Goods and Services Tax Ruling 2008/1 Goods and services tax: when do you acquire anything or import goods solely or partly for a creditable purpose? (GSTR 2008/1) details the Commissioners view: Establishing a connection to input taxed supplies 119. For the purposes of paragraph 11-15(2)(a) a sufficient connection is established if, on an objective assessment of the surrounding facts and circumstances, the acquisition is used, or intended to be used, solely or to some extent for the making of supplies that would be input taxed. Your acquisition of Green Products is solely for a creditable purpose and paragraph 11-5(a) of the GST Act is satisfied. Paragraph 11-5(c) of the GST Act is met as you will provide consideration for the supply of intangible products as you will be making the input taxed financial supply of the provision of an interest in a derivative to the other party. You are registered for GST, so paragraph 11-5(d) of the GST Act is satisfied. As you meet all the requirements in section 11-5 of the GST Act, you will be making a creditable acquisition of intangible products under the Support Agreement. Entitlement to input tax credits Section 11-25 of the GST Act discusses the amount of input tax credits for a creditable acquisition. Under section 11-25 of the GST Act you will be entitled to full input tax credits equal to the GST payable by the other party for your creditable acquisition of intangible products, unless your acquisition of intangible products is partly creditable under section 11-30 of the GST Act. As concluded above, your creditable acquisition of intangible products is solely for a creditable purpose under section 11-15 of the GST Act, and you provide all the consideration by making the financial supply of the provision of an interest in a derivative. Section 11-30 of the GST Act doesn't apply, and you are entitled to full input tax credits equal to the GST payable by the other party. Under Section 9-5 of the GST Act, a taxable supply is made to you when the other party makes a supply that: (a) is for consideration, (b) in the course or furtherance of an enterprise that they carry on, (c) connected with the indirect tax zone (Australia); and (d) the other party is registered or required to be registered. Relevantly, to satisfy paragraph 9-5(a) of the GST Act, an entity must first make a 'supply' for which payment is 'consideration'. The Commissioner has considered when a financial assistance payment is consideration for a supply in Goods and Services Tax Ruling GSTR 2012/2 Goods and services tax: financial assistance payments (GSTR 2012/2) . In GSTR 2012/2, the term 'financial assistance payment' is intended to encompass a wide range of payments including those made to provide support or aid to the payee. An entity that receives a financial assistance payment is liable for GST in respect of that payment if the entity has made a taxable supply in accordance with section 9-5 of the GST Act. GSTR 2012/2 focuses on the first requirement of a taxable supply that there is a 'supply for consideration' in relation to a financial assistance payment and outlines that for there to be a 'supply for consideration' there must be: • a supply • consideration • and a nexus between supply and consideration. The definition of 'supply' provided by section 9-10 in the GST Act includes 'any form of supply whatsoever', such as the 'supply of goods', or the 'supply of services', or 'a provision of advice or information', or 'an entry into...an obligation... 'to do anything' or any combination of any 2 or more of the matters referred to in subsection 9-10(2) of the GST Act. 'Consideration' is defined under section 9-15 of the GST Act. The definition extends beyond payments to include such things as acts and forbearances. A payment will be consideration for a supply if the payment is 'in connection with', 'in response to' or 'for the inducement' of the supply. A other party will be making a taxable supply to you, if they are making a supply to you for which payment of the Availability Payment under the Agreement is consideration. Paragraph 116 of GSTR 2012/2 states the following: 116. In the context of financial assistance payments where the payment is made for the purpose of support or aid, there may be circumstances where no supply is made by the payee. This may be the case where the payee has done nothing in return for or in relation to the payment. Paragraph 119 of GSTR 2012/2 further states the following: 125. A further example of where there may be no supply is where an agreement between the parties is not binding and creates expectations alone. Where the financial assistance payment is made in circumstances where a party expects that something will be done, and it does not involve a binding obligation or the supply of goods, services or some other thing, there is no supply. The mere expectation that an act or event will happen is not sufficient to establish a supply. Goods and Services Tax Ruling GSTR 2006/9 Goods and Services Tax: supplies uses ten propositions to assist in analysing a transaction to identify the supply or supplies made in that transaction. Proposition 6 provides that a 'supply usually, but not necessarily, requires something to be passed from one entity to another and is discussed from paragraphs 92 to 94. It states the following at paragraph 92: 92. The fact that 'supply' requires something to be passed from one entity to another is largely self-evident in a transaction based tax. However, not all forms of supply have this characteristic. For instance, paragraph 9-10(2)(e) includes a creation of a right as a supply. The 'creation' of a right does not involve a passing of the right from one entity to another. In this case, the action of the supplier causes the recipient to make an acquisition but without anything passing between them. Proposition 9 considers that where an agreement does not bind the parties in some way it will not be sufficient to establish a supply by one party to another. Paragraphs 102 and 103 state the following: 102. The Commissioner considers that an agreement that does not bind the parties in some way is not sufficient to establish a supply by one party to the other. This requirement was emphasised by the New Zealand Court of Appeal in C of IR v. New Zealand Refining Co. Ltd (1997) 18 NZTC 13,187 ( New Zealand Refining ). The case concerned payments made by the New Zealand Government to the New Zealand Refining Company, which were only to be made on condition that the refinery remained operational. 103. The New Zealand Court of Appeal noted there was an expectation among the parties that the refinery would continue to operate, but that there was no contractual obligation to that effect. The Government's only recourse in the event that the refinery ceased to be operational was to stop making payments. Although the payments were intended as an inducement to keep the refinery open, they were not linked to any identifiable supply: In our view the payments related to the structure or framework within which supplies of services were expected to be made. They were to compensate NZRC for the removal of the protections given by the Support Letters and its exposure to the hot winds of competition. It was compensation directed to the same purpose as the grants which repaid the loans. The payments were received in course of the taxable activity of NZRC, but they were not in consideration for any supply made by it. Accordingly, they are not subject to GST Based on the support agreement there is an expectation that the other party will meet the eligibility criteria and once this is done receive the payment. Based on proposition 9 the creation of this expectation alone is not in itself enough to meet the definition of a supply. Paragraph 108 of GSTR 2006/9 provides that there may still be a supply where there is no enforceable obligation provided there is something passing from the supplier to the recipient. Example 3 in GSTR 2006/9 examines a transaction (in a tripartite) arrangement that is not based in an agreement that binds the parties and does not involve a supply of goods, services, or some other thing. Example 3 appears as follows: Example 3: loyalty payment with no supply of goods, services, or some other thing 125. M is a manufacturer of goods. M supplies goods to authorised dealers who on-supply those goods to end users. M makes a standing offer to end users that if an end user's purchases from an authorised dealer reach a certain level, M will pay the end user a 'loyalty payment'. 126. D is a dealer and E is an end user. The supply chain is that M supplies goods to D and D supplies goods to E. E receives a loyalty payment from M. 127. There is no supply from E to M in relation to the loyalty payment. There is a contract between M and E as a result of E's acceptance of M's standing offer to make the loyalty payment. However, E is not under any binding obligation to M to purchase goods through D and does not make a supply to M simply by making acquisitions from D. 128. It is E's entry into the contract with D for supply of the goods to E that constitutes E's acceptance of M's standing offer and the contract between M and E is formed at this time. Although M is obliged to make the loyalty payment to E, at no point can M compel E to complete the contract of sale with D. 129. In the absence of any entry into an obligation by E to complete a contract of sale with D, E also does not provide or furnish anything else to M that may be considered to be a supply. There is no supply of goods, services or some other thing by E to M. The loyalty payment made by M to E cannot be consideration for a supply from E to M because E does not make a supply to M. Further, the payment does not give rise to an adjustment event for either M or E. However, if the payment is made on or after 1 July 2010, and the requirements of Division 134 are met, M will be entitled to a decreasing adjustment of 1/11 of the third party payment. If E is making the acquisition wholly for a creditable purpose and is registered or required to be registered E will be subject to an increasing adjustment of 1/11 of the third party payment. Your agreement with the other party is similar to example 3 as: • You only provide the payment to the other party once certain criteria are met. • There is no obligation on the other party to provide anything 'extra' in return for the payment. As discussed above not every connection between supply and consideration meets the requirement for a taxable supply. In this case, while there are obligations under the support agreement, we do not consider the payment made by you to be consideration for those obligations. As such, subsection 9-5(a) of the GST Act has not been met. As there is no evidence of a supply from the other party to you under the support agreement, the payments made are not consideration for a supply made to you under section 9-5 of the GST Act.