The Australian Department of the Treasury sees Bitcoin as one of the ways to evade taxes in the country. The organization is claiming that Bitcoin and digital currencies are a potential threat to its tax collection efforts. The views came to fore when a report was released by the department that outlines areas in which it hopes to change the structure of its tax revenue system.
The new report is an analysis of taxation system after the emergence of new financial technologies, including Bitcoin and other digital currencies. According to the released report new ways of transacting, including cryptocurrencies such as Bitcoin, were not contemplated when the current tax system was designed; however, it must prepare to cope with them.
It is not for the first time that Bitcoin is being blamed for tax evasion by the taxation authority in Australia, there are several instances that tell the overall environment is hostile for the virtual currency. Nonetheless, Bitcoin business in Australia has faced an increasingly hostile environment in terms of the authorities throwing their weight against it.
One major instance came in when Australian Tax Office forced Bitcoin operators such as CoinJar to move offshore to avoid double taxation. The new report looks like an attempt by the ATO to clamp down on Bitcoin for which it is trying to fetch support from the government. Now it has to be seen how the ATO brings the Bitcoin companies under its jurisdiction.
Clamping on Corporate Tax Evasion
Though the users are going to face trouble as they would still be held liable for the Bitcoin they earn even if these are with offshore Bitcoin companies. However, it does not seem to be limited to citizens as according to the new report every non-resident company that derives taxable income from Australian sources is also required to pay tax in Australia.
The new report is contrary to the earlier stand taken by the Senate choosing to make current policy more of a permanent fixture. Nonetheless, the new policy may have come after the initiative by the G-20 meeting held in Australia wherein the issue of black money came in. Clamping on the corporate tax evasion is a major step towards curbing black money.
Interestingly, the report does not elaborate on how the utilization of Bitcoin to avoid tax liabilities might be prevented.
To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com
The new report is an analysis of taxation system […]
