The Australian Taxation Office (ATO) is still deliberating whether Bitcoin and virtual currencies should be treated like goods or money. It has now turned to Australia’s Solicitor-General Justin Gleeson for advice.
Industry leaders had met with authorities on April and educated them on their business models and how various tax treatments would impact their businesses. The ATO had also received numerous submissions from the public on the matter.
The ATO is still unsure of the correct treatment, with a spokesman commenting that they need to ensure that any ruling is within the boundaries of Australian law. He said, “To ensure our advice to the community is comprehensive and robust we have sought further advice from external legal counsel.”
Businesses now have to wait and may face backdated tax bills in the future.
ATFX Thanks NHS Frontline Workers with 1k Fruit Boxes DonationGo to article >>
The Bitcoin Association of Australia expressed mixed feelings on the delay. They were hoping for immediate guidance. Jason Williams, president of the association, said, “As digital currencies such as Bitcoin are now a permanent part of our financial landscape, it is important for Australian regulators and legislators to foster and nurture growth.”
At the same time, they appreciate that the Solicitor-General was brought on board. Said Williams:
“The ATO’s position will deliver one of the first precedents in the Australian legal and regulatory landscape and will be an influential benchmark…As such, it is important not to rush decisions.”
Accountants say that if treated like goods, it will increase tax owing and add complexity to the filing process. In March, the IRS issued a much-anticipated ruling that treats virtual currency like property for tax purposes.