Australia says Bitcoin not taxable as currency

Aug 20, 2014
Crypto-currencies such as Bitcoin should not be considered as money or a foreign currency when it comes to taxation, Australia's tax authority says

Crypto-currencies such as Bitcoin should not be considered as money or a foreign currency when it comes to taxation, Australia's tax authority ruled Wednesday.

In guidance designed to help people finalise their , the Australian Tax Office said Bitcoins were a form of property, disappointing those hoping they would be seen as a .

The decision follows a similar move by the US Inland Revenue Service in March.

"Transacting with Bitcoins is akin to a barter arrangement," the Australian Tax Office said in its guidance.

"The ATO's view is that Bitcoin is neither money nor a foreign currency, and the supply of Bitcoin is not a financial supply for goods and services tax purposes. Bitcoin is, however, an asset for capital gains purposes."

The move disappointed the Australian digital currency industry, which said treating the supply of Bitcoins the same way as the exchange of a commodity meant they would be subject to a 10 percent Goods and Services Tax (GST).

Ron Tucker from the Australian Digital Currency Commerce Association said the move could send industry innovation overseas to places such as Singapore and Hong Kong.

Bitcoin—a virtual payment system launched in 2009 that can be used to pay for from a computer or mobile device—is not currently subject to legislation.

Several countries have warned users of the risks associated with Bitcoin, such as their susceptibility to fraud because of the difficulty of tracing transactions.

Explore further: Bitcoin 'mining pool' promises to stay small

Related Stories

Bitcoin 'mining pool' promises to stay small

Jul 17, 2014

The largest group of bitcoin miners, which maintains and processes transactions in the digital currency, is promising to avoid majority control of the currency as a temporary measure to maintain the payment system's credibility.

Bitcoin rises above $1,000

Nov 27, 2013

The virtual currency bitcoin Wednesday broke above $1,000 per unit, quintupling in a month, according to Mt. Gox, which manages trading in bitcoin.

Recommended for you

ICANN chief stepping down in early 2016

May 21, 2015

The head of the group that oversees all Internet addresses will step down early next year, after a plan to end US oversight of the key nonprofit organization.

How alternative currencies could catch on and cash in

May 21, 2015

Alternatives to cash, like Bitcoin and Uber, may never replace the coins in our pockets or paper bills in our wallets, but they are creating significant social and economic impacts, and with some design adjustments, ...

Spotify introduces video, radio service

May 20, 2015

While saying that it is still a music company at heart, Spotify says it is expanding its lineup to include podcasts, news radio and video streaming.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.