Australian Taxation Office Preparing Rules on Bitcoin transactions Under Taxation Law

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Australian Taxation Office Preparing Rules on Bitcoin transactions Under Taxation Law
Australian Taxation Office Preparing Rules on Bitcoin transactions Under Taxation Law

Australian Taxation Office Preparing Rules on Bitcoin transactions Under Taxation Law

The governments the world over are mulling plans to regulate digital currencies like Bitcoin; in that pursuit, even the Australian Taxation Office (ATO) has put its best foot forward. Now, the organization is trying to envisage a plan wherein it can bring the digital currency under its purview and for it has been keeping a detailed watching brief on Bitcoin-related issues.

The information related to the move from ATO first came in the form of Freedom of Information (FOI) documents obtained by AM. It shows that the tax office has been keeping a detailed watching brief on Bitcoin-related issues and news over the years and thinks that though it was skeptical earlier, now it feels it should be brought under regulation.

The government body realizes that people could use internet currencies to avoid paying tax and or that it is now preparing to release rules on how it will treat Bitcoin transactions under taxation law. The rules will be the first definitive ones on how Bitcoin will be treated, and taxed in Australia.

The news has not been ignored by the Bitcoiners in the country; this became clearer when Jason Williams, president of the Bitcoin Association of Australia said that he thinks it’s quite exciting that the tax office is actually recognizing Bitcoin. He said that he hopes that the tax office identifies Bitcoin as money and it is treated accordingly.

It has to be decided by the ATO whether Bitcoin should be treated as money – like foreign exchange currencies are – or as goods. Many countries consider Bitcoin as a commodity like gold coin, some others consider Bitcoin mining as services and rest others have disallowed Bitcoin completely calling it illegal.

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Whatever the guidelines or rules from the ATO, any message from it would clear the ambiguities that Bitcoin is in. Jason Williams says that from a merchant perspective, it will make things more complicated, or potentially more complicated. If the usability of Bitcoin goes down, the industry is not going to flourish very well in Australia.

There is no hurry on the part of the ATO which says it will release its digital currency guidance by the end of the financial year. Thus, it looks the ambiguities will last for some more months and Bitcoiners will just keep on guessing. At the same time Bitcoiners in Australia are becoming impatient as they want to know the legal status of the digital currency.

Ron Tucker from the Australian Digital Currency Commerce Association was heard saying that the industry wants certainty and a tax ruling will help that.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com