‘Bitcoin’ is a new, ‘hip’ and happening method of payment in lieu of normal currency and it appears that the Australian Taxation Office (ATO) is now taking this other crypto-currency seriously.
The ATO has released three draft rulings in which they’ve set out the ATO’s position, whereby the crypto-currencies are deemed to be either a capital gains tax asset or trading stock, depending on whether the taxpayer is a business or an individual.
- For individuals with ‘bitcoins’, any transactions will most likely have no GST or income tax implications if the ‘bitcoin’ is worth less than $10,000.
- Businesses will have to treat the ‘bitcoin’ currency in a similar manner as to a barter transaction or as trading stock with the relevant GST issues.
The rulings are only draft at this stage and are still to be finalised.