Bitcoin transactions in Australia will be subject to tax. The country's tax authorities have decided to subject transactions involving cryptocurrency to goods and services tax.
Australia has ruled that Bitcoin would not be treated as money, according to the Guardian. The GST will only be applicable to businesses involved in Bitcoin exchanges where customers pay real money for digital currency. Tax authorities said that when Bitcoin is purchased from a business, a GST is applied for the supply of the cryptocurrency.
Before the new ruling, Australia does not usually apply GST to financial transactions. However, the Australian Tax Office said the transfer of one Bitcoin to another is considered "supply" for the purposes of GST. It also explained that it does not consider Bitcoin as money; therefore, the exclusion for the supply of money does not apply.
The implications of the Australian tax may make it difficult for businesses to run a Bitcoin exchange in the country. A Bitcoin exchange will be more expensive as the tax will be imposed on the total amount of digital currency supplied instead of the cut the exchange will take above market value.
Unlike businesses running Bitcoin exchanges, those with trading platforms will pay less tax under the new taxation rules. The difference in tax amounts lie in whether the company is buying or selling Bitcoin or is simply facilitating transactions between third parties like a broker to stock exchange. If the company only brings buyers and sellers together, Australia will only collect GST due on the percentage commission charged by the exchange and not on the total amount purchased.
The new ATO ruling has also complicated the transactions when customers spend their Bitcoins. Sellers that accept the cryptocurrency as payment will have to treat it as a "taxable supply" rather than regular money. According to the ATO, the new rules on Bitcoin are based on its decision to not treat it as a universal means of trade and form of payment under any laws of Australia or any other country.
Bitcoin has been repeatedly criticised for its fluctuating value despite its acceptance in some online retailers especially in the U.S., previous reports said. The cryptocurrency was recently questioned in the submission made by MasterCard Australia to lawmakers that argued for the country to impose standard regulations on Bitcoin.
This news story is reprinted from au.ibtimes.com
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Australia has ruled that Bitcoin would not be treated as money, according to the Guardian. The GST will only be applicable to businesses involved in Bitcoin exchanges where customers pay real money for digital currency. Tax authorities said that when Bitcoin is purchased from a business, a GST is applied for the supply of the cryptocurrency.
Before the new ruling, Australia does not usually apply GST to financial transactions. However, the Australian Tax Office said the transfer of one Bitcoin to another is considered "supply" for the purposes of GST. It also explained that it does not consider Bitcoin as money; therefore, the exclusion for the supply of money does not apply.
The implications of the Australian tax may make it difficult for businesses to run a Bitcoin exchange in the country. A Bitcoin exchange will be more expensive as the tax will be imposed on the total amount of digital currency supplied instead of the cut the exchange will take above market value.
Unlike businesses running Bitcoin exchanges, those with trading platforms will pay less tax under the new taxation rules. The difference in tax amounts lie in whether the company is buying or selling Bitcoin or is simply facilitating transactions between third parties like a broker to stock exchange. If the company only brings buyers and sellers together, Australia will only collect GST due on the percentage commission charged by the exchange and not on the total amount purchased.
The new ATO ruling has also complicated the transactions when customers spend their Bitcoins. Sellers that accept the cryptocurrency as payment will have to treat it as a "taxable supply" rather than regular money. According to the ATO, the new rules on Bitcoin are based on its decision to not treat it as a universal means of trade and form of payment under any laws of Australia or any other country.
Bitcoin has been repeatedly criticised for its fluctuating value despite its acceptance in some online retailers especially in the U.S., previous reports said. The cryptocurrency was recently questioned in the submission made by MasterCard Australia to lawmakers that argued for the country to impose standard regulations on Bitcoin.
This news story is reprinted from au.ibtimes.com
Read more details on accountants melbourne
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