The Senate Economics References Committee is to examine how to develop an effective regulatory system for digital currency (including Bitcoin) that, among other things, ascertains the most appropriate definition of digital currencies under Australian tax law.

The Committee will also examine the development of an effective regulatory system that promotes competition and growth of the digital currency industry.

It will also look at the potential impact of digital currency technology on the Australian economy, including the:

(i)      payments sector,

(ii)     retail sector, and

(iii)    banking sector.

The Committee is due to report by the first sitting day of March 2015.

[LTN 191, 3/10/14]

Determinations issued in August (bitcoins barterd for goods and services)

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.

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.