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Australian Treasury: Its Too Early to Amend Bitcoin Taxes

Avatar Yashu Gola 5 years ago

The Australian Treasury Department representative Kate Preston called Bitcoin a way too “infant” for being considered for tax amendments.

Australian Treasury: Its Too Early to Amend Bitcoin Taxes

The comments came in response to Labor Senator Sam Dastyari’s allegation towards the current Australian Tax Office (ATO) tax laws that, according to him, will end up relocating local Bitcoin business out of its jurisdiction. However, Preston believed that digital currencies like Bitcoin should first be regulated properly before being amended for tax purposes.

“The Treasury view would be that, taxation is not where you start,” she told the Senate Committee.

In August, ATO made it obligatory for everyone, but businesses, to treat virtual currencies like barter transactions. This step had ensured that digital currencies like Bitcoin are to treated like commodities, rather than a fiat currency. Therefore, businesses were made to pay double taxes; once it is bought, and other when it is sold. Senator Sastyari believed that such a taxation, being completely unfair, could simply force the Bitcoin businesses to move offshore.

A similar sentiment was also exhibited by Australian Digital Currency Commerce Association’s Director Ronald Tucker, when he appeared before the Senate Committee in November. “It [ATO Bitcoin Taxation] could result in driving the digital currency businesses that [are] emerging in the sector offshore and potentially underground,” he had stated.

Meanwhile, ATO’s Tax Council Network representative Brett Peterson defended his organization by referring the meaning of the term “currency” mentioned in the current taxation laws. As he stated, the current definition does not make Bitcoin a currency, until it is accepted as an official currency by a foreign nation. Once such a notion is cleared, ATO will start treating Bitcoin as a foreign currency, and therefore the preset laws will be definitely applied on it.

To sum up, the double taxation will continue to haunt Bitcoin businesses in the Kangaroo-land, until the actual definition of “currency” is rewritten from the scratch.

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