The Australian government has announced that it will back a legislative solution to tax concerns surrounding bitcoin as part of a broad policy statement on financial technology.
Under current tax guidance in the country, bitcoin is considered a form of barter rather than a form of money. Australian businesses must pay goods-and-services tax (GST) if they sell digital currencies, and can be liable for the tax should they receive them as payment.
This policy has sparked criticism from the startup community in Australia, who argue it creates an unfair tax environment. Last summer, the Australian Senate called for proposals to resolve the problem in a report on digital currencies.
The government said today that it will work with the digital currency industry in Australia to find a solution, stating: “The Government recognises that that the current treatment of digital currency under GST law means that consumers are ‘double taxed’ when using digital currency to buy anything already subject to GST. The Government is committed to addressing the ‘double taxation’ of digital currencies and will work with the industry on legislative options to reform the law relating to GST as it is applied to digital currencies.” Australian Treasurer Scott Morrison said today that the government "won’t be taxing digital currencies", according to the Australian Financial Review .
The statements came in a wide-ranging policy statement on FinTech released by the Australian government. The statement offered new details on how the government plans to regulate companies working on new financial technologies as well as digital currencies and blockchain applications in particular.
The government wants to ease rules for investors and startups in the FinTech space, the latter of whom would be afforded flexibility within a "regulatory sandbox" approach.
“Removing the ‘double taxation’ treatment for GST on digital currencies and applying adequate anti‑money laundering and counter‑terrorism financing […]
