CoinJar announced in its blog that it will begin charging a 10% Goods and Services Tax (GST) on all bitcoin purchases, effective October 3. The goal is to conform to recent guidance from the Australian Taxation Office, which decided last month that bitcoin will not be treated as currency for taxation purposes. As it is treated as a good, it is subject to GST.
The price quoted on CoinJar will be inclusive of the 10% tax. CoinJar would remit this amount to the tax authority, and the customer gets a receipt showing how much tax was paid.
As CoinJar makes changes to their system at midnight tonight, but price increases don’t take effect until October 3, CoinJar will foot the tax bill on its own during the interim.
TrioMarkets Partners with HokoCloud, Expands its Portfolio with Social TradingGo to article >>
For those selling bitcoin, it gets more complicated. If selling for personal use, there is no charge. If selling on behalf of a registered GST business, the seller will need to supply CoinJar with relevant GST information and confirm the GST collection on his/her behalf. The seller then gets a recipient created tax invoice (RCTI).
CoinJar goes on to say, in diplomatic terms, that such complexity makes the current tax guidance not ideal. They believe in a simpler financial system and will work with the ATO towards one.
The recently launched CoinSwipe product will not be affected by the changes.