Treasurer Scott Morrison has introduced legislation into the Australian Parliament to remove the double taxation of digital currency.

The Bill will ensure that Australians are no longer charged GST on purchases of digital currency, allowing it to be treated the same way as physical money for GST purposes. The law change will retrospectively apply from 1 July 2017, in line with the 2017 Budget announcement.

Once enacted, the reforms will remove GST as an impediment to the use of digital currencies in Australia. This will benefit both local users and Fintech businesses that provide gateway services.

The adoption of a broad definition of “digital currency” will help to future proof the reforms, but it should be periodically reviewed to ensure it is applying as intended.