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 taxation on a notional basis.

The A New Tax System (GST, Luxury Car Tax and Wine Tax) Direction 2015 External Site replaced the Finance Minister's (A New Tax System) Directions 2005 and continues to give effect to the Parliament’s long standing intention that Commonwealth entities are to be notionally liable to pay certain taxes.  The Direction applies only to entities that cannot be made liable to taxation by a Commonwealth law, for example non-corporate Commonwealth entities such as Departments of State which are legally part of the Commonwealth. 

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

Other relevant legislation on GST appropriations management:

  • Section 74A of the PGPA Act
  • Section 27 of the PGPA Rule

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 entities.

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For further information about taxation of Australian Government entities, contact

Last updated: 14 September 2015