From July 1, 2017, the Government will align the GST treatment of digital currency (e.g. Bitcoin) with money. Digital currency is currently treated as intangible property for GST purposes. Consequently, consumers who use digital currencies as payment can effectively bear GST twice, once on the purchase of the digital currency and again on its use in exchange for other goods and services subject to GST. This measure will ensure purchases of digital currency are no longer subject to the GST.
The issue of whether GST should apply to low-value imported goods has been the subject of many reviews and on March 23, 2017 the Government’s bill to extend GST to low-value goods imported by consumers was referred to the Senate Economics Legislation Committee. The committee published its final report on May 9, 2017 and noted concerns about the proposed implementation date due to the complexities of the proposed collection mechanism and the policing of non-compliance. It recommended that the bill pass but that the introduction of the new tax be delayed to July 1, 2018.
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