17 August 1999

The GST and Financial Services - Release of Consultative Document

The report is available from http://www.treasury.gov.au.

The Government released today a consultative document containing proposals for the detailed application of GST to financial services. The document sets out:

  • the proposed scope of input taxation of financial services; and
  • the proposed application of the reduced input tax credit (RITC).

The Government intends to introduce regulations in October specifying the services that will be input taxed and the taxable services that will attract the RITC following feedback on the document.

Under the Government’s proposals, financial services to consumers generally will be input taxed, in line with the proposals in Tax Reform Not a New Tax a New Tax System. That is, GST will not directly apply to most bank charges and fees. In particular, no explicit GST will be charged on fees and charges relating to savings, cheque, deposit and loan (including home mortgage) accounts. Nor will superannuation funds and unit trusts charge GST on their services to members and unit holders.

The Government is seeking comments from interested parties on the detail of the proposals in this paper by 17 September. Comments should be forwarded to:

Manager (Specialist)
Indirect Tax and Payment Design Division
The Treasury
Parkes Place
PARKES ACT 2600