The Australian Tax Office (ATO) has suggested this month that it needs public input regarding its current legislation regarding cryptocurrency tax obligations. This is partly due to an increased interest in cryptocurrency in general within Australia over the last twelve months.
A public comment process has been initiated in order to examine taxpayers concerns and examine issues which may impact on consumers ability to calculate capital gains or losses for tax purposes.
The ATO points out that private or company tax returns need to incorporate cryptocurrency transactions and that taxpayers will now need to provide details regarding these, such as Australian dollar equivalents and other details regarding the parties involved in the transaction.
Like Japan, Australia sought to strengthen its money laundering laws in 2017, which threw focus on the regulation of digital currencies within Australia. This was a clear shift from its 2015 “hands-off” approach to the use of cryptocurrencies.
Regulation of cryptocurrency has been an issue over the past few years. The Australian government now maintains that transacting with Bitcoin is similar to a barter, being neither money nor foreign currency and as such, is not a financial supply for goods and services purposes. The unpopular tax on Bitcoin purchases will now be lifted in July of this year and Australians will no longer have to pay goods and services tax (GST) on cryptocurrency purchases.
From a consumer perspective, the future seems promising for Australians despite further regulation of cryptocurrencies within the country. Senators from both leading political parties in Australia (both Labour and the Coalition) have called for the Reserve Bank of Australia to accept cryptocurrencies as an official form of currency.
Moves towards regulating the Australian tax system by seeking public consensus indicates that the nation is possibly considering how to incorporate digital currency into the mainstream as cryptocurrencies become more widely used.