For a month starting May 3, The Treasury of the Australian government will be accepting submissions from interested parties to comment on a newly-released discussion paper entitled ‘ GST treatment of digital currency ’ as part of the 2016-17 Budget.
The Treasury says the government has realized that consumers are ‘ double taxed ’ when using digital currency to purchase anything already subject to GST – Goods and Services Tax. It added that this treatment may be preventing the use of digital currencies and hindering their further development.
Jennifer Dudley-Nicholson, National technology editor in the Herald Sun , writes:
“Australia has emerged as the surprise world leader in digital currency after the Turnbull Government revealed plans to reduce tax on Bitcoin transactions and create ways to test other intangible currency in the country. The announcement came the day after Brisbane computer scientist Craig Wright publicly revealed himself as the currency’s creator, putting Australia at the centre of the controversial cryptocurrency.” Digital Currency – Game Changer or Bit Player
The discussion paper provides background and questions for consultation on the potential approaches available to identify digital currencies in the GST law and change their GST treatment to remove ‘double taxation’. Interested parties are expected to lodge their submissions electronically or by post.
However, in a government response to the senate economics references committee report: Digital Currency—Game Changer or Bit Player on May 5, it agrees that consumers should not be subject to the GST twice when using digital currency to purchase goods or services.
This comes after the committee’s view that digital currency should be treated as money for the purposes of the GST and its recommendation that the government consults with the states and territories to consider amending the definition of money in the A New Tax System (Goods and Services Tax) Act 1999.
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