Removing the double taxation of digital currency

The Government has released exposure draft legislation to remove the double taxation of digital currency under the goods and services tax (GST) law. Under these proposed amendments, which give effect to the Government’s 2017-18 Federal Budget announcement, digital currency will be treated like money for GST purposes from 1 July 2017. Comments were due on the draft materials by 26 July 2017.

GST determination on the treatment of the supply of a credit card facility

GST Determination GSTD 2017/1, issued on 12 July 2017, sets out the Commissioner’s view on when the supply of a credit card facility is GST-free under paragraph (a) of Item 4 in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (Cth). According to the Determination, the supply of a credit card facility is GST-free to the extent that it is anticipated that the credit card facility will be used by the cardholder to undertake transactions while the cardholder is physically outside Australia. The fact that a credit card facility allows overseas use is not sufficient evidence in itself that the facility will be used by cardholders physically outside Australia.

Following industry consultation, the Australian Taxation Office’s (ATO) original view, released in draft form in 2014 (GSTD 2014/D1), has changed. Specifically, the ATO no longer requires the cardholder’s location outside Australia to be integral to the relevant use of the credit card facility. The final Determination applies from 12 July 2017.

ATO GST administration mid-year performance report 2016-17

The ATO has released its GST administration mid-year performance report 2016-17. Prepared in accordance with the ATO’s reporting obligations under the GST Administration Performance Agreement, the report provides an account of the ATO’s performance in administering the GST for the States and Territories during the period 1 July to 31 December 2016. It reports that by 31 December 2016, the ATO had collected AUD29.63 billion in net GST cash (excluding non-general interest charge penalties), as well as raising AUD1.76 billion in GST liabilities from compliance activities.

GST legislative instruments

The following GST legislative instruments have been issued:

·       Draft GST Legislative Instrument WTI 2017/D5: Waiver of Tax Invoice Requirement (Corporate Card Statements) Legislative Instrument allows corporate card holders to claim input tax credits without holding a tax invoice in certain circumstances. Comments were due by 6 July 2017.

·       Draft GST Legislative Instrument VM 2017/D1: Valuable Metals Market Value Determination 2017 sets out the method to calculate the market value of valuable metal for the purposes of determining whether the market value of a taxable supply exceeds the valuable metal threshold. Comments were due by 26 July 2017.

·       Goods and Services Tax: Foreign Currency Conversion Determination (No. 1) 2017, which applies from 1 July 2017, sets out the method to convert amounts of consideration that are expressed in foreign currency into Australian currency for the purposes of working out the value of a taxable supply.

·       GST-free Supply (National Disability Insurance Scheme Supports) Amendment Determination 2017 makes the supply of Specialist Disability Accommodation GST-free for participants in the National Disability Insurance Scheme (NDIS) from 1 July 2016. A replacement determination will also make supplies of specialist disability accommodation and accommodation and tenancy assistance GST‑free from 1 July 2017.

·       GST-free Supply (National Disability Insurance Scheme Supports) Determination 2017 specifies which kinds of supplies to a participant of the NDIS can be GST-free. The Determination applies to supplies made between 1 July 2017 and 30 June 2021.

New international trade facilitation arrangements

The Minister for Immigration and Border Protection has announced that Australia has entered into several new international trade facilitation arrangements. Mutual Recognition Arrangements (MRAs) have been signed with Korea’s Customs Service, Canada’s Border Services Agency and the Customs and Excise Department of Hong Kong. Refer to PwC Australia’s TaxTalk Alert for further information about the new MRA and an update on the Australian Trusted Trader program.

Excise refund scheme for distillers

The Minister for Revenue and Financial Services and the Minister for Small Business in a joint media statement have announced that from 1 July 2017, distillers can access a refund of 60 per cent of excise paid up to AUD30,000 per financial year. The excise must have been paid on or after 1 July 2017 in order to access the refund. The scheme will not be extended to alcopop producers who merely purchase the spirits and add the soda and other flavours, or to wine producers who benefit from the Wine Equalisation Tax rebate.