Australian Senate says bitcoin should be treated as a regular currency

Australian Senate says bitcoin should be treated as a regular currency

The Australian Senate says that digital currency transactions should be treated in the same way as fiat for the purposes of taxation, overturning a previous judgement from the country's Taxation Office that labelled bitcoin holdings as 'intangible assets'.

The earlier ruling by the ATO was met with an outcry from Australia's bitcoin community, which judged the additional 10% tax burden as punitive and a bar to innovation.

In a report on the issue, the the Australian Senate Economics References Committee recommends that the government consults with the states and territories to consider amending the definition of money in a 1999 Act of Parliament to include digital currency as a form of legal tender. This would make the crypto-currency exempt from Goods and Service Tax (GST).

The UK Government implemented a similar ruling exempting VAT from bitcoin trades back in March 2014. In the wake of the original ATO ruling, Australia's largest Bitcoin company, CoinJar, outlined plans to move its headquarters to the UK to take advantage of a more favourable regulatory regime and avoid the 10% GST levied on customers using its service down under.

In reaching its conclusions, the Committee received submissions from 48 groups and individuals, many of them representing the country's nascent bitcoin community.

The Senate was less clear on whether digital currencies such be classed as foreign currencies or commodities for the purposes of taxation, suggesting that further research and analysis was needed to reach a binding judgement.

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