No tax reprieve for bitcoin in Australia
- Mar 4, 2015 | Richard Asquith
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.