On 5 May 2016, the Australian Treasury published the government response to the Senate Economics References Committee report concerning the goods and services tax (GST) treatment of digital currency. In general, the government agrees with the recommendations included in the report, including that digital currency should be treated as money for the purposes of the goods and services tax.
Currently, digital currencies are treated as intangible property subject to GST when acquired, which may result in double taxation when the digital currency is then used to make a purchase also subject to GST. Treating digital currency as money would address the double taxation issue by making digital currencies outside the scope of GST. In addition to treating digital currencies as money, Treasury has also put forward two other options in a discussion paper to address the double taxation issue. These include treating digital currency as an input taxed financial supply, which is not subject to GST but would not allow for input tax credits, or making digital currencies GST exempt, which would allow for input tax credits.
Click the following links for the government response to the Senate Committee report and the discussion paper on the GST treatment of digital currency.