International Family Business Blog

Bitcoins are not “currency” – Australian Tax Office

The Australian Taxation Office (ATO) has just issued a guidance paper stating: “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.”

Furthermore, the ATO says: “Bitcoin is, however, an asset for capital gains tax (CGT) purposes.”

For businesses that use Bitcoins (or any other crypto-currencies) to buy and sell trading stock, the transactions will be treated for tax purposes as a bartering arrangement. Buying trading stock with Bitcoins will require businesses to charge the 10% GST on the coins. Selling trading stock for Bitcoins will mean the business can claim an input tax credit for any GST paid (provided the vendor is registered for GST).

The ATO has also issued five (5) draft rulings regarding various aspects of dealings that might be undertaken with Bitcoins. 

The guidance paper (and links to the draft rulings) can be found at- https://www.ato.gov.au/printfriendly.aspx?url=/general/gen/tax-treatment-of-crypto-currencies-in-australia---specifically-bitcoin/

Australian Tax Office ramps up offshore money chase

The Australian Taxation Office (ATO) is ramping up its “Project Do It” assault on offshore tax evasion by Australian residents. It is encouraging residents with undisclosed offshore funds to take advantage of an amnesty before 19 December 2014.

To date, some 375 residents have made disclosures under the amnesty arrangements. Approximately AUD37 million has been reported so far. 

According to the Taxation Office, a further 450 or so residents have indicated they propose to make a voluntary disclosure under the amnesty.

A new interactive webpage (http://taxmatters.gov.au) has been launched dealing with global tax evasion.

As an example of the degree to which the Australian Taxation Office has already liaised with other international revenue authorities to combat international evasion and the wide scope that they have for exchanging information, the ATO has a photo array on its website -

http://taxmatters.gov.au/ourglobalsystem

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