09 May 2017

Australian Federal Budget 2017-18: Goods & Services Tax (GST)

This article was written by Stuart Courtney

The only surprise GST announcement in the Budget is the introduction from 1 July 2018 of a requirement for purchasers, rather than vendors to remit GST directly to the ATO on the sale of newly constructed residential premises.

Purchasers of newly constructed residential premises to pay GST directly to the ATO

From 1 July 2018, the purchaser of newly constructed residential premises will be required to pay GST directly to the ATO instead of the vendor.

This measure is being introduced due to concerns that the vendors of new property developments are not remitting GST on sales even though the vendors claim input tax credits in respect of their expenses.

It is likely that this measure will also result in a reduction in the amount of stamp duty payable by the purchaser as the GST should not be consideration for stamp duty purposes.

Removal of double taxation on digital currencies

As announced in last year’s Budget, the Government intends to remove the double taxation of digital currency. This measure will take effect from 1 July 2017.

The ATO has issued rulings which state that digital currency is not money for GST purposes. When digital currency is exchanged for goods and services this results in GST being payable on the supply of the digital currency and on the supply of the goods and services. The GST legislation will be amended to remove the double taxation by treating the supply of digital currency in the same way as ordinary currency.

Supplies of gold, silver and platinum

The Budget also confirms the announcement made in March this year that the Government will amend the GST legislation with effect from 1 April 2017 to require the purchasers of gold, silver and platinum to remit GST directly to the ATO.

For a full analysis of this year's Budget measures, please see Australian Federal Budget 2017-18.

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