Australia Banking & Fintech Tax Guide
Australian banking and fintech taxation. The guide covers: the digital banks and the neobanks — the 'digital banks' (the 'neobanks' — the 'Up Bank', the '86400', the 'Judo Bank', the 'Volt Bank') are the 'Authorised Deposit-taking Institutions (the 'ADIs')' and are 'subject to the corporate tax at 30%'; the 'digital banks' must 'hold the ADI licence' from the 'APRA' (the 'Australian Prudential Regulation Authority') and 'comply with the regulatory requirements'; the 'digital banks' provide the 'banking services' (the 'deposit accounts', the 'transaction accounts', the 'lending', the 'credit cards') — the 'interest income' and the 'fee income' are 'assessable'; the Buy Now Pay Later (the 'BNPL') providers — the 'BNPL providers' (the 'Afterpay', the 'Zip', the 'Klarna', the 'Humm') 'provide the interest-free credit' to the 'consumers' — the 'BNPL providers' earn the 'merchant fees' (the 'fees from the merchants') and the 'late fees' (the 'fees from the consumers'); the 'BNPL income' is 'assessable income' for the 'corporate tax'; the 'BNPL providers' are 'subject to the GST on the 'merchant fees' (the 'GST on the fees for the services'); the 'BNPL providers' may be 'subject to the 'BNPL regulation' under the 'National Consumer Credit Protection Act' (the 'BNPL licensing from the 2025/2026'); the payment institutions — the 'payment institutions' (the 'PayPal', the 'Stripe', the 'Square', the 'TransferWise (the Wise)', the 'Revolut') are the 'providers of the payment services' (the 'online payments', the 'money transfers', the 'merchant acquiring'); the 'payment institutions' are 'subject to the corporate tax at 30%'; the 'payment institutions' are 'required to hold the 'Australian Financial Services Licence (the 'AFSL')' from the 'ASIC'; the 'payment services' are 'input-taxed supplies' for the 'GST purposes' — the 'payment institution does NOT charge the GST on the fees' (the 'input-taxed financial supply'); the GST on the fintech services — the 'fintech services' (the 'digital payment services', the 'lending services', the 'crowdfunding services', the 'digital wallet services') are 'input-taxed supplies' — the 'GST is NOT charged on the fees'; the 'fintech companies' can 'claim the reduced input tax credits (the 'RITCs')' at the '75% rate' for the 'certain expenses'; the 'fintech companies' that 'supply the digital products' (the 'software', the 'apps', the 'SaaS') are 'subject to the GST at 10%' on the 'subscription fees' (the 'digital product GST'); the fintech licensing and the regulatory tax — the 'fintech companies' must 'pay the ASIC levies' (the 'annual ASIC supervision levies') and the 'AFSL application fees'; the 'ASIC levies' are 'deductible' for the 'corporate tax purposes'; the 'APRA levies' for the 'ADI-licensed fintechs' are also 'deductible'.
Digital Banks & BNPL
- Digital banks: The 'ADI-licensed neobanks' are 'subject to the corporate tax at 30%'.
- BNPL providers: The 'merchant fees and the late fees' are 'assessable income'.
- BNPL regulation: The 'BNPL providers' are 'regulated under the National Consumer Credit Protection Act'.
For the corporate tax and the company tax returns, see our Corporate Tax Guide →.
GST on Fintech
- Input-taxed supplies: The 'payment services' and the 'lending services' are 'input-taxed supplies'.
- RITCs: The 'fintech companies' claim the '75% RITCs' on the 'certain fintech expenses'.
- Digital products GST: The 'software, the apps, and the SaaS subscriptions' are 'subject to the GST at 10%'.
For the GST rules and the input-taxed supplies, see our GST Guide →.