Your Bitcoins aren't money – but it is barter, so we'll tax it, ta ... says Australia's taxman
Pay attention, miners
The Australian Taxation Office (ATO) has issued its official assessment of Bitcoin and other crypto-currencies – and decided it isn't money but can be taxed.
The ATO's note says BTC is “neither money nor a foreign currency” and that “transacting with Bitcoins is akin to a barter arrangement”.
Australia taxes formal barter schemes, so Bitcoin gets the same treatment. That means the nation's Goods and Services Tax (GST), the equivalent of US sales tax and the UK's VAT, applies to purchases made using the crypto-currency.
Bitcoin can also be taxed as an asset. Australia operates a capital gains tax that sees a variable amount of tax paid on assets sold for more than their purchase price.
The ATO has also made it hard to pay employees in Bitcoin, making such payments a fringe benefit that employers will be taxed for offering.
There's also some good news: professional Bitcoin miners will be able to deduct the cost of their outgoings from their taxable income. But any income raised by mining will be subject to conventional income tax treatments. ®