In its budget summary for 2017-18, the Australian government states that as part of its plan to “make it easier” for digital currency businesses to operate in the country. It will ensure that nowhere in the supply chain is general sales tax (GST) paid more than once.
“The Government will make it easier for new innovative digital currency businesses to operate in Australia,” the summary reads.
“From 1 July 2017, purchases of digital currency will no longer be subject to the GST, allowing digital currencies to be treated just like money for GST purposes. Currently, consumers who use digital currencies can effectively bear GST twice: once on the purchase of the digital currency and once again on its use in exchange for other goods and services subject to the GST.”
Australia has had a difficult relationship with cryptocurrency regulation until now. The decision to allow double taxation originally caused several well-known operators to quit the country back in 2014, while innovation has subsequently lagged behind markets in which businesses have enjoyed greater freedom.
Innovative fintech deals involving Blockchain have surfaced this year, however, and the tone of the budget extract points to a desire to change Australia’s environment.
“Innovation will drive productivity growth in Australia,” it continues.
“The Government is committed to establishing Australia as a leading global financial technology (FinTech) hub and is announcing a new package that aims to position our local fintech industry as a world leader.”
Meanwhile, local business optimism is also increasing.