Taxation of Commonwealth entities

Under the Australian Constitution, liability for Commonwealth taxes cannot extend to the Commonwealth or to an Australian Government entity. A framework has been implemented for the Commonwealth, underpinned by the "The New Tax System" legislation to make Australian Government entities subject to The New Tax System on a notional basis.

The Finance Minister's (A New Tax System) Directions 2005, effective from 25 January 2005, apply to all Australian Government agencies and authorities that cannot be made liable to the Goods and Services Tax (GST), the Luxury Car Tax (LCT) and the Wine Equalisation Tax (WET) by a Commonwealth law. The Finance Minister's (A New Tax System) Directions 2000, made on 27 June 2000, were revoked upon gazettal of the Finance Minister's (A New Tax System) Directions 2005.

The Directions continue the framework that imposes administrative charges on Australian Government agencies and authorities which mirror the GST, the LCT, and the WET. From the perspective of these entities, the framework means that they are notionally subject to these taxes.

See further Finance Circular 2005/01.

Additional information about the GST and indirect tax reforms is available at the Australian Taxation Office´s website External Site.

Other relevant legislation:

Commonwealth taxes and regulatory charges

Under the Inter-Governmental Agreement on the Reform of Commonwealth-State financial relations, the Commonwealth, States and Territories agree the taxes and compulsory charges that are outside the scope of the GST. A copy of the list of taxes, fees and charges that are not subject to the GST is available on the Treasury website External Site.

The agreed list of taxes and regulatory charges that are outside the scope of the GST will be subject to on-going review and adjustment as necessary in consultation with the Ministerial Council for Commonwealth-State Financial Relations. The Treasury is the central point of contact for Commonwealth agencies.

Registration of Commonwealth entities for taxation purposes

Special arrangements apply to Australian Government entities seeking registration for The New Tax System.

Further information

For further information about taxation of Australian Government entities, contact the Legislative Review Branch (LRB) within Finance.


Phone: (02) 6215 3657

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Last updated: 15 June 2015