Maryna Kovalenko
Tax Co-Founder
Brisbane, Australia
Reviewed by
Kova Tax
Registered Tax Agent
Online NFT marketplaces that are considered an Electronic Distribution Platforms (EDP), are required to collect and remit GST on sales from merchants to Australian consumers.
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Last updated

ATO position on NFT and GST treatment

The ATO has updated their guidance on the tax treatment of NFTs, where they clarified that:

NFT is not a form of digital currency.

Other crypto such as bitcoin is considered to be a digital currency for GST purposes, and as such it is classified as an input-taxed supply that requires no GST to be collected on sales.

As the ATO has clarified that an NFT is not a form of digital currency, then you are not able to rely on the exemption from GST. Due to this, NFTs are subject to the normal GST rules. You must consider sales of NFTs in the same way that you would when selling everyday goods or services.

This article will consider the GST impact on NFT marketplaces that operate as Electronic Distribution Platforms.

Electronic Distribution Platform (EDP) and NFT GST

If you operate an online NFT marketplace as an EDP, that facilitates sales from merchants to Australian consumers, then you may have GST obligations that you are required to meet.

What is an EDP?

Generally, you operate an EDP if:

  • Merchants can use your service to make sales to consumers.
  • Your service is delivered by electronic communication, for example a website, an online marketplace (similar to OpenSea, Etsy), or an app store.

A service isn’t an EDP if it only provides a carriage service such as internet service providers, access to a payment system, or advertising that makes customers aware of products and links them to the merchant’s website.

When is an EDP operator responsible for GST?

If your entity operates an NFT marketplace as an EDP, you will be responsible for GST on NFT sales made by merchants through your platform if:

  • You are registered, or required to be registered for GST.
  • It is a sale of low value imported goods (<$1,000 AUD) to a consumer.
  • Either you or the merchant helps to get the goods to Australia.
  • It’s a sale of an imported service or digital product to an Australian consumer.

In such circumstances and as per section 84-55 of the New Tax System (Goods and Services Act) Act 1999 (the Act), the EDP will be treated as the supplier for the purposes of GST law. This means the EDP must collect GST, and remit to the ATO via its Business Activity Statements.

EDPs and Australian consumer

For an EDP operator to be liable for GST, the supply must be connected with Australia.  For a supply to be connected with Australia, section 9-25 (5)(d) of the Act, states the requirement that the recipient of the supply must be an Australian consumer.

The Goods and Services Tax Ruling 2017/1, (which is relevant for tax periods after 1 July 2017), provides some further guidance on this and suggests the two elements that must be met for a recipient to be an Australian consumer of imported services and digital products.

They are the:

  • Residency element.
  • Consumer element.

In many cases, to determine the residency element, the information gathered by your entity’s usual business systems provides a reasonable basis to determine whether the recipient is an Australian resident. The types of evidentiary information the ATO will accept to support this include, but is not limited to:

  • The recipient’s billing address.
  • The recipient’s mailing address.
  • The recipient’s banking or credit card details.
  • Mobile phone SIM.
  • Recipient’s IP address etc.

An entity is not limited to the business systems approach to determine residency, if they can demonstrate other reasonable steps were taken depending on the circumstances in which the entity makes the supply to the recipient.

To determine the consumer element, a recipient is a consumer if they are not a business registered for GST, or, registered for GST but don’t purchase imported services or digital products in their business.

Practical issues with determining consumer status

There is a very real and practical challenge for an EDP such as an NFT marketplace to determine Australian consumer residency and status.

Many entities that are operating NFT marketplaces do not, or are not able to obtain the information required to determine whether a recipient of a sale is an Australian consumer of imported services and digital products.

In many cases, entities that facilitate sales through their NFT marketplace are fully automated. There is often a lack of transaction identification and there are limited means, if any, to investigate the residency and consumer element of the transactions. This creates challenges for NFT marketplaces that facilitate sales, to determine if the supplies are being made to Australian consumers and thus taxable for GST.

The ATO guidance and section 84-100 of the Act provides some hope, when they suggest that an entity can treat a supply as not being made to an Australian consumer, if they have taken reasonable steps to gather enough information and reasonably believe the recipient is not an Australian consumer.

However, what steps are reasonable in gathering information and what information is sufficient to have a reasonable belief, will depend on the context of the particular supply, and there is no guidance currently available in relation to NFT consumers.

Syla has a network of crypto tax professionals that we'd be happy to put you in touch with if you need written advice. Reach Out.

Key Takeaways

Sales of NFTs are subject to GST.

Many NFT marketplaces are likely to be considered an Electronic Distribution Platform (EDP) for the purposes of GST in Australia.

EDPs are required to take reasonable steps to gather enough information to reasonably believe if recipients are an Australian consumer or not.

EDPs must collect and remit GST to the ATO, when offshore supplies of digital products and services are made through their platform to Australian consumers.


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ATO Guidance, Non-fungible tokens, last updated 7 November 2022.

ATO Guidance, GST on imported services and digital products, last updated 8 December 2021.

ATO Guidance, If you are an electronic distribution platform operator, last updated 8 December 2021.

ATO Guidance, GST definitions, last updated 2 Mar 2021.

Section 9-25 (5)(d) of the New Tax System (Goods and Services Act) Act 1999.

Section 84-55 of the New Tax System (Goods and Services Act) Act 1999.

Section 84-100 of the New Tax System (Goods and Services Act) Act 1999.

GSTR 2017/1 Goods and services tax: making cross-border supplies to Australian customers.

LCR 2018/2 GST on supplies made through electronic distribution platforms.


The information in this article reflects our understanding of existing legislation, proposed legislation, rulings and other tax law, as at the date of issue. In some cases, the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way.

The information provided in this article is purely factual in nature and does not constitute tax advice, financial product advice or legal advice. The information is not, nor is it intended to be, comprehensive or a substitute for professional advice on specific circumstances. If you require professional advice that takes into account your particular circumstances, you should consult an appropriate professional.