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No tax reprieve for bitcoin in Australia

  • VAT
  • 05 March 2015 | Richard Asquith

No tax reprieve for bitcoin in Australia

Australia has ruled out the prospect of reforming its punitive Goods & Services Tax regime on the trading of digital currencies such as bitcoin.

Currently, Australian GST is levied on bitcoin transactions as a barter deal under terms set by the Australian Taxation Office. This in effect subjects currencies sales and purchases to double taxation of GST at 10%. ATO issued its current guidance in August 2014, although it did provide an exemption where trading is for businesses purposes.

The government has been warned that such a globally uncompetitive fiscal position may force the nascent cryptocurrency industry offshore. Territories such as Singapore and Hong Kong have either limited GST liabilities for related services of none at all.

The ATO reaffirmed its position this week that it sees bitcoins as a commodity, and is not willing to reclassify it as a virtual currency, exempt from GST, until there are similar regulatory reclassifications by the banking authorities.

EU VAT differences on bitcoin

In the EU, the European Commission is listening to submissions on the EU VAT rules for bitcoin at the moment.  There is deep division between countries in their views of digital currencies - assest/commodity or currency - and the subsequent VAT liability.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.