The Australian Tax Office is going to start treating bitcoins like shares, according to a Wednesday announcement. The guidance was delivered now to allow Australians to include cryptocurrencies on their 2013-2014 tax returns.
Cryptocurrency transactions will be considered barter transactions, which give them specific tax implications. Individuals’ investments in bitcoins are now subject to capital gains tax, however purchases equivalent to less than $10,000 AUD are not subject to taxation.
Businesses will now have to record bitcoin transactions and treat them as ordinary income, which includes applying GST both when selling and receiving them.
Employees paid in bitcoins may be subject to fringe benefit tax consequences.
“The guidance paper and draft tax rulings issued today provide certainty for the Australian community on the ATO’s treatment of crypto-currencies within the current legislative framework,” Australian Tax Office Senior Assistant Commissioner Michael Hardy said.
Despite problems such as rampant theft and a collapsed exchange, bitcoins continue to proliferate, and the range of companies which accept them continues to grow quickly. A recent patent filing by Amazon seems to suggest that AWS will soon accept the cryptocurrency, joining the ranks of service providers that accept bitcoin payment.
By specifically addressing the legal status of cryptocurrencies, Australia is catching up to the US, where a March 2014 IRS guidance seeks (with debatable success) to clarify cryptocurrency taxation. In May, a tweet claiming to link to a story about a US government decision on how to treat bitcoin spread malware to Twitter users.