Crypto-currencies such as Bitcoin should not be considered as money or a foreign currency when it comes to taxation, Australia’s tax authority ruled Wednesday.<\/p>\n
In guidance designed to help people finalise their tax returns, the Australian Tax Office said Bitcoins were a form of property, disappointing those hoping they would be seen as a currency.<\/p>\n
The decision follows a similar move by the US Inland Revenue Service in March.<\/p>\n
“Transacting with Bitcoins is akin to a barter arrangement,” the Australian Tax Office said in its guidance.<\/p>\n
“The ATO’s view is that Bitcoin is neither money nor a foreign currency, and the supply of Bitcoin is not a financial supply for goods and services tax purposes. Bitcoin is, however, an asset for capital gains tax purposes.”<\/p>\n
The move disappointed the Australian digital currency industry, which said treating the supply of Bitcoins the same way as the exchange of a commodity meant they would be subject to a 10 percent Goods and Services Tax (GST).<\/p>\n
Ron Tucker from the Australian Digital Currency Commerce Association said the move could send industry innovation overseas to places such as Singapore and Hong Kong.<\/p>\n
Bitcoin — a virtual payment system launched in 2009 that can be used to pay for goods from a computer or mobile device — is not currently subject to legislation.<\/p>\n
Several countries have warned users of the risks associated with Bitcoin, such as their susceptibility to fraud because of the difficulty of tracing transactions.<\/p>\n
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