A common question that gets asked on the bitcoin australia subreddit is what your tax obligations if you use Bitcoin in Australia. Too clear afew things up I have created this post which will focus on the use of bitcoin in australia for tax purposes.
The tax office ruled mid 2017, that if you use bitcoin for investment, you will have to declare it come tax time, BUT if your use of bitcoin is completely personal, and you use it to purchase goods and services, you will not have to declare your cryptocurrency assets aslong as they are under $10k in value.
The ATO’s view is that Bitcoin is neither money nor a foreign currency, and the supply of bitcoin is not a financial supply for goods and services tax (GST) purposes. Bitcoin is, however, an asset for capital gains tax (CGT) purposes.
Generally, there will be no income tax or GST implications if you are not in business or carrying on an enterprise and you simply pay for goods or services in bitcoin (for example, acquiring personal goods or services on the internet using Bitcoin). Where you use bitcoin to purchase goods or services for personal use or consumption, any capital gain or loss from disposal of the bitcoin will be disregarded (as a personal use asset) provided the cost of the bitcoin is $10,000 or less.
The tax office also ruled out the charge of GST when purchasing bitcoin, so keep your eye out for charges of GST if you do purchase it. None of the sites we review here charge GST.
In more recent news, The Australian Government is set to regulate the use of bitcoin! Under the countries new bill to regulate money laundering through the use of bitcoin, the new service is called AUSTRAC ( Australian Transactions and Reporting Analysis Centre).
Austrac’s Plan is to further regulate bitcoin exchanges in Australia and will be funded by a huge government grant of $36 Mil per financial year. Scary right? While the use of bitcoin is encouraged by Australia, you’d better hope your not using it for any “Shady” activites. Find out more information about exchanges in Australia HERE.
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