Under the ATO’s guidance paper and rulings, Bitcoin transactions will be treated like barter transactions with similar taxation consequences. “Generally, there will be no income tax or GST implications for individuals if they are not in business or carrying on an enterprise and they pay for goods or services in bitcoin,” the ATO said in its guidance. “Where an individual uses 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.
According to Ron Tucker, the chair of the Australian Digital Currency Commerce Association and a partner at digital currency trading service BitTrade, the ATO’s approach puts Australia on the back foot, especially at a time when the regulators across the globe are walking up to the potential of crypto-currencies in the mainstream space. “This is quite a retrograde step and at odds with the approach taken by other countries,” Mr Tucker told Business Spectator.
While ATO senior assistant commissioner Michael Hardy said that the draft tax rulings provide certainty for the Australian community, the local Bitcoin community has labelled the guidance as a retrogressive step that could potentially damage the emerging digital currency businesses in the country.
Read more here: Business Spectator