The Coalition government has introduced legislation to remove double taxation of digital currencies, ensuring Australians will no longer be charged GST on purchases of virtual money, such as Bitcoin and Ethereum.
The Bill will ensure that digital currency is treated the same way as physical money for GST purposes.
Treasurer Scott Morrison said in a statement on Thursday: “Currently, consumers who use digital currency can effectively bear GST twice: once on the purchase of the digital currency and once again on its use in exchange for other goods and services subject to the GST.”
The Bill is expected to make it easier for digital currency businesses to operate in Australia, as GST will no longer apply to purchases made using bitcoin, ethereum and other digital currencies. Furthermore, there seems to be no cap on the amount of spending on goods and services that are excluded from GST.
Morrison stated: “We have worked closely with the FinTech industry to develop the reform, which was unanimously approved by the States and Territories.
“The Turnbull Government has provided strong support for the FinTech industry – allowing tax concessions to encourage investments in early-stage start-ups, legislating a crowd-sourced equity funding regime, announcing measures to encourage new challenger banks as well as creating a regulatory sandbox which encourages businesses to test innovative financial services without facing the costs of regulatory licensing.”
The law will retrospectively apply from July 1, 2017. Taxpayers will need to review their GST position back to this date, and if entitled to a refund of overpaid GST, must lodge a request for an amended assessment.
For more information about GST credits and refunds contact the ATO or click on the following link: http://bit.ly/2y7cnji