Australia’s GST framework remained structurally unchanged during the first half of 2026. The GST rate continues to be 10%, with no rate, base or registration threshold changes announced in the 2026–27 Federal Budget. The principal GST developments during the period were technical legislative amendments, updated Australian Taxation Office (ATO) guidance, sector-specific compliance clarification, and continued enforcement activity against GST fraud.
1. GST Rate and Framework
Australia’s GST rate remains 10% under the A New Tax System (Goods and Services Tax) Act 1999. The registration threshold remains AUD 75,000 in annual turnover, or AUD 150,000 for non-profit bodies.
GST-free supplies continue to include most basic food, health and education services, exports and international transport. Input-taxed supplies continue to include financial supplies and residential rent.
The 2026–27 Federal Budget did not include changes to the GST rate, GST base, registration thresholds or exemptions.
2. International Recommendations on GST Reform
During H1 2026, both the OECD and IMF recommended that Australia consider increasing GST revenue as part of broader tax reform.
The OECD Economic Survey of Australia 2026 noted that Australia’s GST rate is low by international standards and identified base broadening or a rate increase as possible components of broader tax reform.
The IMF Article IV Consultation Report similarly recommended broadening the GST base and increasing consumption tax revenue.
Treasurer Jim Chalmers rejected a GST rate increase or base expansion, stating that the government did not intend to pursue GST reform.
3. Reverse Charge and Input Tax Credit Amendments
The Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Act 2025 amended the GST Act to address reverse charge and input tax credit timing issues.
The amendments allow taxpayers to deduct GST payable under the reverse charge rules where the GST amount exceeds the input tax credit entitlement, subject to the statutory conditions.
The legislation also allows taxpayers to attribute unclaimed input tax credits to a later tax period, provided the claim remains within the four-year time limit.
Both measures apply from 1 July 2024.
4. Draft Ruling on Cross-Border Supplies
The ATO issued draft guidance replacing and consolidating GSTR 2017/1 on cross-border supplies to Australian consumers.
The draft ruling clarifies the Commissioner’s views on when a supplier may treat a recipient as not being an Australian consumer, including where the supplier believes the recipient is registered for GST.
The guidance is relevant to non-resident suppliers of digital services, software, professional services and other cross-border supplies into Australia.
5. Electricity Sector Guidance
The ATO issued GST guidance for the electricity sector, including on bundled power purchase agreements, gifted network assets and agency arrangements.
For bundled power purchase agreements involving electricity and renewable energy certificates, the ATO confirmed the GST attribution approach for certificate transfers.
The guidance also addresses GST treatment where customers fund network assets that are transferred to electricity distributors, and the documentation required where parties rely on agency arrangements under Subdivision 153-B.
6. Sunscreen Classification
The ATO finalised guidance on the GST treatment of sunscreen products.
Sunscreen products marketed primarily as therapeutic sun protection products remain GST-free where they satisfy the relevant requirements.
Cosmetic or personal care products that include SPF protection as a secondary feature remain taxable.
7. GST Enforcement
GST fraud remained a priority area for the ATO and the Serious Financial Crime Taskforce.
Enforcement activity continued to focus on GST refund fraud, false invoicing, precious metals fraud and electronic sales suppression tools.
The ATO continued publicising outcomes from Operation Protego and precious-metals GST fraud investigations as part of its compliance messaging.
8. Supplementary Annual GST Return
The ATO released the 2026 Supplementary Annual GST Return for Top 100 and Top 1,000 taxpayers.
The return forms part of the ATO’s justified trust program and is used to obtain additional GST governance, controls and transaction information from large taxpayers.
