The ATO says it has on Wed 20.8.2014, delivered guidance on the tax treatment of Bitcoin and other crypto-currencies in time for people to complete their 2013-14 income tax returns.
The guidance includes Draft Taxation Determinations and a Draft GST Ruling (see below). The ATO has also issued a Guidance Paper. Under its guidance, the ATO says Bitcoin transactions are treated like barter transactions with similar taxation consequences.
ATO Senior Assistant Commissioner Michael Hardy said the ATO has consulted extensively with Bitcoin experts, businesses, industry bodies and other external stakeholders to develop the guidance and explain the obligations of Bitcoin users. Mr Hardy said people should seek a private ruling if their circumstances are not covered by the guidance.
The ATO on Wed 20.8.2014, issued the following Draft Taxation Determinations:
- TD 2014/D11 – It states that Bitcoin is not a “foreign currency” for the purposes of Div 775 of the ITAA 1997.
- TD 2014/D12 – It says that Bitcoin is a “CGT asset” for the purposes of s 108-5(1) of the ITAA 1997.
- TD 2014/D13 – It indicates that when held for the purpose of sale or exchange in the ordinary course of a business, Bitcoin is trading stock for the purposes of s 70-10(1) of the ITAA 1997.
- TD 2014/D14 – It states that the provision of Bitcoin by an employer to an employee in respect of their employment is a property fringe benefit for the purposes of s 136(1) of the FBTAA.
DATE OF EFFECT: When the final Determinations are issued, it is proposed they will apply both before and after their date of issue.
COMMENTS are due by 3 October 2014. ATO contact: Andrea Wood – Tel: (02) 6216 1486; Fax: (02) 6216 1250; Email: andrea.wood@ato.gov.au.
The ATO also issued Draft GST Ruling GSTR 2014/D3, which considers whether Bitcoin is “money” as defined in s 195-1 of the GST Act and whether it is a “financial supply” under s 40-5(1) of the GST Act. Broadly, the Draft states that a transfer of Bitcoin is a “supply for GST purposes” as Bitcoin is not “money” for the purposes of the GST Act. It also states that a supply of Bitcoin is not a “financial supply” and therefore is not input taxed.
DATE OF EFFECT: When the final Ruling is issued, it is proposed to apply both before and after its date of issue.
COMMENTS are due by 3 October 2014. ATO contact: Hoa Do – Tel: (08) 9268 5171; Fax: (08) 9268 8371; Email: hoa.do@ato.gov.au.
[LTN 160, 20/8/14]