Australia Bitcoin Tax to Establish the Country Amongst the Leading Users of Digital Currency
Bitcoins have certainly taken the world by a storm and there’s absolutely no denying that. However, as their influence starts to get heavier, governments begin to understand their potential economic impact. As a decentralized currency with substantial merit behind it and billions of dollars of turnaround, this is not something that should be taken lightly.
And Australia, pursuant to the promises given earlier in 2016, delivered on the promise of introducing a new regulation, removing the double taxation of transactions which take place using cryptocurrencies such as Bitcoin.
How is the Bitcoin Tax Relevant?
Well, for once, it has been long years during which digital currency adopters in the country of Australia were actually taxed twice for the same transactions. Once, they would be imposed with a GST (Goods and Service Tax) on the product subjected to the transaction and again, for the GST which has been levied on the digital currency that has been actually used for making the payment.
Let us walk you through an example. The GST tax is included in the price of goods that you purchase regularly, provided the vendor is registered under the appropriate order. Now, if you walked into a coffee and asked for a can of soda that costs $1, you’d pay 10c for the soda’s GST. However, if you paid with Bitcoin or any other form of cryptocurrency, you’d also have to pay 10c for using it as a transaction currency. That’s how the system had worked up until this particular moment.
What Happened to Australia Bitcoin?
Well, at the time, the government of Australia made a thorough commitment to rectify the situation and to remove this double taxation. This happened back in march, 2016. One year later, Bitcoin was yet to be seen as a property classified as “intangible”’ by the ATO (Australia Tax Office) and there were yet no changes made in regard to the inappropriate and, quite frankly, damaging effect of said double taxation.
With this in mind, the actions of the government or, more precisely, their failure to produce actions, was heavily criticized by the FinTech community in the country. It was said to be “outdated” in terms of taxation and that the cryptocurrency had to be treated in the way that regular currencies are treated by the law. Danielle Szetho, CEO of the industry lobby group FinTech Australia noted that this should be one of the priorities to be put in the overall reform paper and that it was one one of the things that the government had allegedly agreed to incorporate.
Obviously, at that point, 14 months after said promise, nothing had taken place. The month after that, digital currencies actually got a tax cut in the federal budget for 2017 as part of the friendly agenda with the FinTech community.
The Current Conditions
Now, the government of Australia had finally set forth a bill which is to push the necessary regulations to get rid of the double taxation when cryptocurrencies are being used for a transaction.
What is more, the treasurer of Australia, Scott Morrison, described that as an action which is going to further solidify the reputation of the country as a FinTech Centre of the world. In fact, allow us to quote his words exactly:
“The Bill will ensure that Australians are no longer charged GST on purchases of digital currency, allowing it to be treated the same way as physical money for GST purposes. The law change will retrospectively apply from 1 July 2017, in line with the 2017 Budget announcement.”
Furthermore, it is also important to understand that the bill would definitely have to go through the overall approval of the parliament prior to being incorporated and mandated as part of the working national law. The announcement of the government, however, has not yet revealed details as to when this particular bill is to be brought up in order to go through the voting due process. Nevertheless, the local bitcoin industry as well as the overall cryptocurrency ecosystem in the country are definitely going to get a substantial boost. This is due to the fact that they would become at least 10% cheaper.
This is going to have a tremendous impact on a range of different people for a range of reasons. For once, those of you who would like to blast off some steam and play at an online casino would no longer have to worry about 10% of your profits going away if you play at one of the numerous casinos which use cryptocurrencies such as BitStarz, a Bitcoin Casino.
What Would be The Outcome?
Well, the truth is that a range of different people playing casino games in Australian Dollars could actually contemplate using cryptocurrencies as means of an alternative investment. Additionally, Bitcoin casino payments are no longer going to be taxed additional 10% due to the fact that it is a form of digital currency.
With all this said, it is important to understand that this is a solid and substantially beneficial implementation of legal regulations. It constructs proper position which is in the obvious and right direction – towards adopting digital payments and even potentially incentivizing them as being more effective. Of course, there is a lot of work on solidifying a position of the kind but the tremendous increase in the overall value of Bitcoin shows that this is, in fact, the way to go.