Australia: regulators urged to mull on Bitcoin tax

The inquiry by The Senate Economics References Committee (SERC) has reached Parliament, zdnet.com reports.

The inquiry is set to evaluate the appropriate definition of cryptocurrencies under Australian taxation laws and is expected to deliver its final report on 15 March 2015.

In August 2014, the Australian Taxation Office (ATO) released its guidance on the taxation treatment of Bitcoin and other cryptocurrencies, timed to coincide with the lodgement of Australians 2013-2014 income tax returns. The guidance paper and rulings called for users’ Bitcoin transactions to be treated like barter transactions with similar taxation consequences, unless they are doing it for business purposes.

The ATO said in its guidance that generally, there would be no income tax or Goods and Services Tax (GST) implications for individuals if they are not in business or carrying on an enterprise, and if they pay for goods and services in the cryptocurrency.

Under the guidelines, any capital gain or loss from the disposal of Bitcoin paid by an individual to purchase goods or services for personal use or consumption will be disregarded as a personal use asset. However, Bitcoin users transacting coins as investment may be subject to capital gains tax rules when they dispose of it, as they would for share assets.

The Senate inquiry comes as other international markets, including the US, move to take advantage of digital currency commerce growth, but unlike China, for example, which is still skeptical about the cryptocurrency.