CANBERRA: Over a year after the Australian government promised to put an end to the double taxation of bitcoin purchases, authorities are yet to formally legislate the changes. Under still-current rules mandated by the Australian Tax Office, bitcoin is seen as an “intangible” property. By definition then, bitcoin is a money instrument and cannot be a “negotiable instrument.” ‘This means that existing laws dictated a double tax on bitcoin, once when exchanging fiat for digital currency, and goods and services tax (GST) applied again when a digital currency is used for settlement,’ the law reads.
‘A transfer of bitcoin from one entity to another is a ‘supply’ for GST purposes. The exclusion from the definition of supply for supplies of money does not apply to bitcoin because bitcoin is not ‘money’ for the purposes of the GST Act,’ reads another excerpt from the law, first published in in late 2014. In March 2016, the Australian Government Treasury published a detailed policy statement, pledging support for the local FinTech system to much attention. Among the list of changes to be enforced was a marked effort to exempt digital currencies, like bitcoin, from double taxation. The government’s Treasury also revealed that it had recognized over 600 digital currencies, each ‘with different protocols for transaction processing and confirmation, and with different approaches to the growth in the supply of digital currency units.’
