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Thread: Australian Tax Office now wants to tax bitcoins

  1. #1
    cyberdude's Avatar
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    Australian Tax Office now wants to tax bitcoins

    Investors and businesses that trade using the digital currency Bitcoin are on notice as the Australian Taxation Office plans to be among the first to crackdown on undisclosed capital gains and GST at tax time this year.

    In a statement provided to the Financial Review’s Sunday program on Channel 9, ATO senior assistant commissioner Michael Hardy said the tax office has been monitoring the growth in the numbers of Bitcoins along with other alternative payment systems and will provide further advice to taxpayers before June 30.

    “The ATO is working on a holistic understanding of the taxation treatment of Bitcoin to be in a position to provide certainty for the Australian community,” he said.

    The ATO’s US counterpart, the IRS is also looking to release similar guidelines this year.
    Bitcoin on the regulator’s radar

    It comes as the Australian Securities Investments Commission has also confirmed to the Financial Review that Bitcoin is on its regulatory radar.

    “Electronic currencies or crypto currencies - which include Bitcoins - are a developing area globally. Like other regulatory bodies around the world, ASIC is considering whether and how current legislation (such as the Corporations Act) might apply to these arrangements,” said ASIC spokesperson Hilarie Dunn.

    The value of Bitcoin has risen from $US13 at the start of 2013, to a high of $US1200 in November and is currently trading around $US800 ($889).

    Fueling its popularity, has been its profit growth and decentralised status. It also appeals because it allows traders to buy and sell goods, such as coffee, shoes and even property, in real time and without the transaction costs that would otherwise apply at a bank or by using a credit card or another rival electronic form of payment, such as via PayPal.

    But Bitcoin has also attracted negative headlines, most recently with the owners of a Bitcoin company in the US being charged with fraud and money laundering.

    Complicating matters is the absence of government, banker or regulator backing Bitcoin, making it arguably less transparent and perceived as a riskier investment than normal currencies.

    Alex Malley chief executive of accounting body CPA Australia has welcomed the news, but said the difficulty facing the ATO is that transactions using Bitcoin are hard to trace.

    “People are having Bitcoins stolen off their website – not traceable. The FBI has been involved in projects in 2013 where they seized $US28 million worth of Bitcoins, so this is an ongoing challenge.”

    There is also the anonymity which surrounds the Japanese developer of Bitcoin - which is simply a virtual coin or often explained as a mathematical code which is run by a network of computer servers.

    The Attorney General’s office is reviewing the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, to see if a regime change is now needed to cover Bitcoin and better protect investors.

    Mr Hardy added that “paying for goods and services with new types of payment tokens such as Bitcoin still means that the seller may need to account for GST and/or include the income in their business tax return.

    “The buyer may also need to keep records of the value of the purchase and account for the tax consequences if it represents a business expense or if the purchase is an asset which may be subject to a capital gain or loss.”
    ATO weighs Bitcoin rules

  2. #2
    IG72's Avatar
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    “The ATO is working on a holistic understanding of the taxation treatment of Bitcoin to be in a position to provide certainty for the Australian community,” he said.
    Double-Speak Translation: We have no fucking idea how to tackle this, but of course, the government is here to protect you from yourselves so, er ... help us screw you over by helping us, like with information on yourselves about your transactions ... please??? (whispered: Do you think they bought it? Particularly that "community" crap?)
    Last edited by IG72; 09-02-14 at 04:10 PM.

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