Australian Treasurer: Our Efforts to Eliminate Double Taxation on Bitcoin

Australia’s treasurer and his fintech advisory group met on Friday to further discuss innovation in the country’s financial services sector, including removing double taxation on blockchain technology and digital currencies, including Bitcoin.

get along with

The meeting discussed a number of fintech-related topics, including the opportunities presented by blockchain technology. In addition, the government also reiterated its intention to eliminate the double taxation system of digital currencies as consumption tax.

Currently, Australians need to pay GST when using digital currency for transactions, and are subject to double taxation. The Australian Taxation Office (ATO) does not recognize Bitcoin and other cryptocurrencies as a currency or foreign currency. The ATO said:

They are classified as assets and are subject to capital gains tax, much like barter ^[1] . When a business sells goods and services for bitcoin, it must pay excise tax on that bitcoin.

However, the advisory group has reportedly made some substantial progress with the government on related taxation issues.

Eliminating double taxation on digital currencies

In March this year, the Australian government publicly pledged for the first time to end unfair treatment of digital currencies. Shortly afterwards, Australian Treasurer Scott Morrison released a research report on the issue of consumption tax on digital currencies.

(Australian Treasurer Scott Morrison)

Since then, the government has been studying Morrison’s proposed digital currency taxation framework. In the research report, Morrison sincerely invites interested individuals or institutions to participate in the feedback and design of the digital currency taxation framework. The deadline for proposal submission is June 3, 2016.

Bitcoin is growing in popularity

The Australian government has publicly stated on several occasions that Bitcoin is a popular payment method, writing in its digital currency guide:

In Australia, digital currencies such as Bitcoin are becoming increasingly popular and are a hot payment method.

In summary, the Australian Government is committed to working with the FinTech industry to create an internationally competitive environment and to play an active, central role in assisting economic transformation.

Notes (↵ returns to text)

1. Barter refers to the direct exchange of goods or services of equal or substantially equal value between a buyer and a seller, without the involvement of cash or a third party.