For GST purposes, securities include (among other things):
- debentures, stocks or bonds a company issues
- debentures, stocks or bonds a government entity issues or plans to issue
- documents an individual issues that would be debentures if a body corporate issued them
- interests in a managed investment scheme.
See also:
- Definition of 'securities' in GSTR 2002/2 Goods and services tax: GST treatment of financial supplies and related supplies and acquisitions ('Glossary of terms' in Schedule 1)
Financial supplies
A supply you make is a financial supply only if it is listed as a financial supply (or an incidental financial supply) in the GST Regulations. The supply of securities is:
- a financial supply
- input taxed unless it is GST-free.
GST and securities you supply
Supplying securities when you float a company can be any of the following:
- input taxed if you supply them to Australian residents, for example, if you issue the shares domestically
- GST-free if you issue them to non-residents outside the indirect tax zone
- a combination of both if you issue them to Australian residents and to non-residents outside the indirect tax zone.
You do not include GST in the price of a supply if it is input taxed or GST-free.
However, the GST treatment of your supply of securities can affect whether you can claim GST credits on purchases you use to supply your securities.
As a general rule, under GST law, you cannot claim GST credits for GST you pay in the price of purchases that relate to making input taxed supplies. However, there are some exceptions to this general rule.
See also:
- GSTR 2006/3 Goods and services tax: determining the extent of creditable purpose for providers of financial supplies