You must register for GST if your GST turnover is $75,000 or more. GST turnover does not include input taxed sales. Sales of digital currency are input taxed sales. If you only make sales of digital currency you do not need to register for GST.

However, you may still choose to register for GST. In deciding whether to register you should consider:

• the increased time and cost of record keeping and reporting
• the fact that GST applies to taxable sales and you could claim GST credits for creditable purchases (if you make any)
• whether you can claim GST credits on your reduced credit acquisitions.

If your turnover is less than $75,000 (and you do not choose to register for GST) or if you only make input taxed sales of digital currency, you do not have to do anything in relation to GST. However, normal income tax rules still apply.

Sales of digital currency are input taxed sales (financial supplies) which means that you:

• don’t pay GST on the sales of digital currency you make
• generally can’t claim GST credits for the GST included in the price you pay for anything you purchase to make those sales.

However, you may be able to claim GST credits on purchases you use to make digital currency sales in following situations:

• if you don’t exceed the financial acquisitions threshold-in which case you will be entitled to full GST credits for purchases relating to digital currency sales
• if you exceed the financial acquisitions threshold may be able claim reduced GST credits if you make a specific type of purchase.

A reduced credit acquisition is a specified type of purchase for which a reduced GST credit is available when you use the purchase to make financial supplies. For these purchases you can claim 75% of any GST included in the purchase price. The type of purchase must be listed, you cannot claim 75% GST credits on all your costs. Sales and purchases of digital currency are financial supplies.

For digital currency sellers, the costs associated with the following services acquired from another entity will include:

• commission, brokerage costs or arranging services provided by entities that facilitate buying and selling of digital currencies.
• costs in relation to transaction processing, account maintenance and report generation services.

If, you are making sales of digital currency to non-residents, those sales will be GST-free.

As a result, you would not charge any GST on the sales to non-residents but you are entitled to claim full GST credits for costs incurred in relation to making those sales. Normal GST registration rules would apply.

No GST consequences arise when you use digital currency to pay for goods and services in your business.

Digital currency is a method of payment and the consequences of using it as payment are the same as the consequences of using money as payment.

If you receive digital currency as payment for your sales of goods and services normal GST rules apply. For example, if you make a taxable sale of goods for which you received digital currency as payment, you are required to remit 1/11th of the payment received for that taxable sale.

The amount of GST your remit and report on your activity statement has to be an amount of money in Australian currency.

If you make a taxable sale and the consideration received as payment is expressed in digital currency, in addition to complying with the standard tax invoice requirements under the GST law, you also must:

• include on the document the GST payable in Australian currency; or
• provide ‘sufficient information’ to the recipient to work out the GST payable on the sale in Australian currency.

Examples of sufficient information include:

• the price expressed in Australian currency
• the value expressed in Australian currency; or
• the GST payable, the price or value expressed in a digital currency and the conversion rate used by the seller, or a statement, to work out the GST payable in Australian currency.