Bitcoins to be Taxed Like an Asset in Australia
August 21, 2014 Taxation in Australia
CANBERRA – Bitcoins and all other forms of crypto-currencies will not be regarded as assets when used in Australia.
On August 21st the Australian Tax Office (ATO) issued a new guidance on the tax treatment of Bitcoins and other crypto-currencies, confirming that they will be regarded as an asset, and not a foreign currency.
According to the ATO, transaction carried out by an individual in which the payment is rendered with a crypto-currency shall be treated as a barter transaction, regardless of whether the transaction takes place at a physical store, or online.
Transactions with crypto-currencies will not be liable for GST or income tax, if they are not carried for business purposes.
As crypto-currencies are now considered to be an asset, any gains or losses made from a transaction involving Bitcoin, or any other cypto-currency, may be liable capital gains tax, unless they are carried out by an individual, and the purchase valued at less than AUD 10 000.
Businesses which transact in Bitcoin will be required to record the value of the particular coin as part of its ordinary income, and GST may need to be charged when supplying the coins.
Fringe Benefit Tax may also apply in instances when employees are paid in crypto-currencies.
The details in the guidance have already been subject to some criticism from crypto-currency experts in Australia, as they had previously called for such coins to be regarded as foreign currency, a move which would significantly decrease the administrative task of transacting in Bitcoins.
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