Australia’s tax authority is slated to provide tax guidance for users of bitcoin and other “alternative payment systems” before June 30th, according to a statement provided by the Australian Taxation Office’s (ATO) senior assistance commissioner Michael Hardy on the Financial Review‘s Channel 9 program on Sunday.
“The ATO is working on a holistic understanding of the taxation treatment of Bitcoin to be in a position to provide certainty for the Australian community,” he stated.
Hardy said that “paying for goods and services with new types of payment tokens such as Bitcoin still means that the seller may need to account for GST [similar to a value-added tax] and/or include the income in their business tax return.” and “The buyer may also need to keep records of the value of the purchase and account for the tax consequences if it represents a business expense or if the purchase is an asset which may be subject to a capital gain or loss.”
Such guidelines have been long-awaited. Scores of bitcoin and other digital currency users are left somewhat in the dark with regard to how to properly file their taxes. Making matters worse, many accountants hired to file on behalf of taxpayers are not familiar with bitcoin and have no proper guidance to go by.
The case in similar in the United States, where the New York State Department of Financial Services recently held hearings to determine how/if bitcoin should be regulated. Meanwhile, it is being reported that the Internal Revenue Service (IRS) is also working on providing taxpayers with guidance specific to digital currency this year.
At the Australian Securities Investments Commission (ASIC), bitcoin and other digital currencies are on their radar:
“Electronic currencies or crypto currencies – which include Bitcoins – are a developing area globally. Like other regulatory bodies around the world, ASIC is considering whether and how current legislation (such as the Corporations Act) might apply to these arrangements,” said Hilarie Dunn, spokesperson at ASIC.