Australia has revealed how it intends to tax Bitcoin

The Australian Taxation Office (ATO) released its guidance on the taxation treatment of Bitcoin and other crypto-currencies today, timed to coincide with the lodgement of Australians’ 2013-2014 income tax returns. “The guidance paper and draft tax rulings issued today provide certainty for the Australian community on the ATO’s treatment of crypto-currencies within the current legislative framework,” said senior assistant commissioner Michael Hardy. The guidance paper and rulings calls for individuals’ Bitcoin transactions to be treated like barter transactions with similar taxation consequences, unless they are doing it for business purposes. The ATO said that, generally, there will be no income tax or Goods and Services Tax (GST) implications for individuals if they are not in business or carrying on an enterprise, and if they pay for goods and services in the crypto-currency. Under the guidelines, any capital gain or loss from disposal of Bitcoin paid by an individual to purchase goods or services for personal use or consumption will be disregarded as a personal use asset — as long as the cost of the Bitcoin is AU$10,000 or less.