Friday, February 3, 2023

Australian Gov’t Ends Infamous Bitcoin Tax With New Legislation

Australian Gov’t Ends Infamous Bitcoin Tax With New Legislation

The Australian parliament just passed a new bill that will effectively end the so-called “double tax” that Australian crypto users experienced under the nation’s goods and services tax (GST). This legislative move is set to make crypto transactions considerably more user-friendly in the nation.

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The goods and services tax— a major headache for everyday crypto users in Australia—is now set to end in the nation as of July 1st, 2018.

The GST was first applied to cryptocurrency usage in Australia back in 2014, when parliament passed premature legislation that characterized blockchain currencies as “bartered goods” for the purposes of taxation. Accordingly, that inaugural policy was protested by industry experts, who called for this flawed status to be immediately revised.

Australia Bitcoin Tax

Under this preliminary legislation, the problem boiled down to the fact that Australian crypto users were taxed twice—once for initial purchases of cryptocurrencies and then another time when conducting transactions as a “bartered good” under the GST.

Lawmakers heard these complaints and have been cooperative ever since, with numerous notable Australian officials promising to make good on the problem since 2015.

Now, this move marks the culmination of these promises. Today, October 19th, 2017, the Australian legislature finally passed the “revision” bill that will officially end the “double tax” on crypto use in the nation as of next summer.

Repealing the Bitcoin Tax: A Short Way Coming

Responding to lawmakers’ requests from 2016, the Australian Treasury Department drafted legislation to rectify Australian crypto users’ GST problem back in May this year.

Then, after a few months of legislative standstill, the Australian Senate Economics References Committee requested that a review be made on the bill’s status two months ago, in August.

Now, just a matter of weeks later, this bona fide crypto tax cut has officially passed the Australian parliament.

The way the problem was rapidly addressed should be assuring to Australian crypto users, many of whom have been reluctant to spend or make purchases with their digital currencies as a means to avoid the previously burdensome GST.

Indeed, this development shows the Australian government is serious about succeeding in its efforts to bring crypto use “into the daylight,” per the Treasury Department in 2016:

“The Government recognises that that the current treatment of digital currency under GST law means that consumers are ‘double taxed’ when using digital currency to buy anything already subject to GST. The Government is committed to addressing the ‘double taxation’ of digital currencies and will work with the industry on legislative options to reform the law relating to GST as it is applied to digital currencies.”

Copycats May Soon Follow

With the GST now repealed, Australia will likely become a model for other nations who are looking to liberalize cryptocurrency usage as well.

For example, advocates in the U.S. opposed to the Internal Revenue Service’s designation of crypto as “property” can now also point toward Australia’s example, arguing that a policy update similar to Australia’s tax policy revision is just as badly needed in America.

What’s your take? Does this crypto “tax cut” pave the way for other similar tax revisions across the world? Let us know where you stand. 

Images via Pixabay

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