The Australian Treasurer and the FinTech Advisory Group met on Friday to further discuss the development of innovation in the financial services sector. Among topics focused on were blockchain technology and ending the double tax for digital currencies, including bitcoin.
Some Progress Made
The meeting discussed various FinTech topics, including a review of opportunities for blockchain technology. Also, the government reiterated “its intention to stop the ‘double taxation’ of digital currencies under the GST regime.”
Currently, consumers in the land down under are ‘double taxed’ when using digital currency to buy anything already subject to Goods and Services Tax (GST). The Australian Tax Office (ATO) does not consider bitcoin and other cryptocurrencies money or foreign currency.
“They’re treated as assets for capital gains tax purposes, making them more like a barter arrangement,” according to the ATO. “When receiving bitcoin in return for goods and services, a business may be charged GST on that bitcoin.”
However, according to the press release, “the Advisory Group has already made some real progress working with government.”
Ending the Double Tax on Digital Currencies
In March, the Australian government announced its commitment to end the unfair treatment of digital currency for the first time. Following the announcement Australia’s Treasurer, Scott Morrison, released a discussion paper on the GST treatment of digital currency in May.
The government has been working on the framework of how it can end double taxation of digital currencies since the announcement. With the discussion paper, he invited interested parties to submit feedback and comments on the design of the proposal to address the GST issue. The closing date for submissions was June 3, 2016.
Bitcoin is ‘Increasingly Popular’
“Digital currencies such as Bitcoin are an increasingly popular option for accepting and making payments in Australia.”
Overall, the Australian government is committed to working with the FinTech industry to create an internationally competitive environment and “play a central role in aiding the positive transformation of our economy,” their announcement stated.
When do you think the Australian government will finally end bitcoin double taxation? Let us know in the comment section below.
Images courtesy of ATO, Twitter, Shutterstock