Starting next year, Australians will no longer have to pay the goods and services (GST) tax on cryptocurrency purchases, often referred to as the bitcoin tax.
The law, which instilled a “double taxation” of cryptocurrencies-first when buying it, then later when buying items subject to eh tax- was enacted in 2014. In other words, the legislation treated cryptocurrencies as bartered goods for GST purposes, which quickly received widespread criticism from technology advocates. Last year, government officials pledged to rectify the issue.
The Australian Senate Economics References Committee first proposed a review of the case in August, and the Treasury Department first set out new legislation to resolve the issue in May’s budget.
As of today, the new legislation was officially passed in the country’s parliament. This means, as of July 1, 2018, bitcoin and other cryptocurrencies will get the same GST treatment as foreign currencies.
In the bigger picture, the move comes amidst a larger, international dialogue about the tax treatment of blockchain-enabled assets, and the various approaches government regulations can and should take.
Featured Image: depositphotos/gustavofrazao