From 2017, Bitcoin And Other Digital Currency Will No Longer Be Taxed Twice In Australia

Image: Shutterstock

As part of its push to foster innovation and fintech startup businesses in Australia, the government's 2017 Federal Budget will cut the GST for purchases of digital currency, allowing Bitcoin and online games' in-game money to be treated just like plain Australian dollars for tax purposes.

At the moment, anyone purchasing a digital currency in Australia is technically liable for GST expenses on that purchase. From 1 July 2017, though, the government is exempting purchases of digital currency from Australia's 10 per cent Goods and Services tax. The announcement was made in March of last year, and in 2014 the ATO said small-scale traders -- below $10,000 -- would not be charged GST on their transactions.

GST still applies when exchanging those digital currencies for other goods and services that are themselves subject to the GST, of course. The government confirmed the removal of GST on digital currencies in its innovation and fintech fact sheet.

In the government's budget measures paper, removing GST on Bitcoin was called out as being useful while not costing the Federal Government any significant revenue: "Removing double taxation on digital currencies will remove an obstacle for the financial Technology (fintech) sector to grow in Australia. This measure is estimated to have a small but unquantifiable decrease in GST collections and associated payments to the States and Territories over the forward estimates period."

Startups aren't happy with the work the government has done, though. CEO of startup advocacy group StartupAUS Alex McCauley: “There clearly isn't a focus on startups or innovation in this budget. That will certainly cause some frustration, because the Government has done a lot to build expectations that it is committed to making Australia one of the best countries in the world for innovators. It still has a lot of work to do to deliver on that commitment.

From the budget's fintech fact sheet:

The Government will make it easier for new innovative digital currency businesses to operate in Australia. From 1 July 2017, purchases of digital currency will no longer be subject to the GST, allowing digital currencies to be treated just like money for GST purposes. Currently, consumers who use digital currencies can effectively bear GST twice: once on the purchase of the digital currency and once again on its use in exchange for other goods and services subject to the GST.

WATCH MORE: Tech News


Comments

    Wow. In the 1890's before we had a national currency, banks printed up their own banknotes. They promised to take your unsafe gold and silver coins and store them securely and that bits of paper were just as good. In time they found people were gullible enough to accept it when they print butt-loads more paper money than there was in reserve to the point that in Melbourne, (unadjusted) prices for houses were as high as today! Then it crashed because yeah- there wasn't any money .. all the gold and silver had been disappeared by the banks and everyone was left holding bits of worthless paper and huge debt.

    The Government stepped in and passed the currency act making it illegal for anyone to print money but them. Yay. But in the 1930's, banks sidestepped this by making bigger loans than they could actually cover .. it was another way they found to print money without actually printing any - and yeah.. crashed again, so the laws were tightened to protect people from unscrupulous bankers injecting fake wealth into society.. Banks were nationalized, the value of our currency went up and it was all nice and stable until Keating deregulated the banks (go Labor) and allowed banks to print fake money in the form of credit card - 80's crashes but more foreign banks move in with more unbacked foreign fake money and now we have an 8 trillion dollar economy backed by 32 billion in printed notes - backed by 320 million in bullion. Put simply, sell all the houses in 6 of Perth's suburbs and you've taken all the printed money out of circulation - the rest is fake.

    The government's job was to protect us from banks 'injecting capital' (printing fake money) as the banks proudly claim to do, and they failed.. Yeah I have bitcoins, no I don't see anything wrong with owning or using foreign or crypto currency in Oz, I just want to b*tch and warn folks - when you held gold or silver coins in your hand, you OWNED the wealth. Canada recently stripped all their pure nickel coins from circulation and replaced them with nickel plated steel ones.. Get this, the nickel content was so high that $600 worth on nickel metal was being exchanged for currency with a face value of $200. And people handed it over! We did the same - our old shillings were exchanged for CuNi 10c coins.. see how this sits - if you bought a loaf of bread then it cost you a shilling. If you tucked away your shiny new 10c coin from 1966, it would take you 30 or so of them to buy a loaf today but get this, if you'd kept that shilling, it's silver value remained the same and it would still buy you a loaf of bread .. silver kept it's value, the coins - YOUR wealth, would have retained it's value rather than being nibbled away by inflation (devaluation of currency value). Yeah I know people think money is money and it doesn't matter whether it's knucklebones or seashells, but that only works within a stable economy where people all pretend it has real value. ask Venezuela what they use to buy things.. since their currency is worthless, no one in the world wants to trade so they have no food being imported, no cars, no goods - who'd sell them to them when they're going to be paid in worthless Venezuelan cash? At the moment bitcoins would have served them well.. but better would have been if their money was still made of silver or gold - at least they'd be able to trade and buy food.

Join the discussion!

Trending Stories Right Now