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Bitcoin Taxation in Australia

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Bitcoin Australia

Bitcoin Taxation would be implemented on 2 things in Australia, personal consumption and speculative gain

In Australia if the original cost of Bitcoin purchase is under $10000 (AUD) then gain would be exempted from bitcoin Taxation because that would be considered as personal consumption under threshold level of 10K

Bitcoin price is sky rocketing and with that many countries around the world are trying to bring gains from Bitcoin in Tax net, some of those countries have been successful in this while others are waiting for any clarity from experts to understand this technology in a better way, countries like Japan and South Korea have been way ahead from other countries to acknowledge this technology, Canada and Australia are also on the right track along with United States

Bitcoin Taxation structure in Australia

If you are living in Australia and holding a Bitcoin then bitcoin Taxation would depend upon the purpose of holding Bitcoin, According to Australian Taxation Office, there are broadly two reasons for purchasing Bitcoin: personal consumption and speculative gain.

How you are taxed will depend on which category you fall into and, most importantly, how the ATO will view your activity.

Above all, every single transaction needs to be fully documented, including not only “what”‘ is purchased, but “why” it was purchased.

Here’s the Official announcement by Australian Taxation Office

https://www.ato.gov.au/General/Gen/Tax-treatment-of-crypto-currencies-in-Australia—specifically-bitcoin/

If your intention in purchasing Bitcoin is to use it to buy goods or services for personal consumption, then any profit from resale will be assessable as a capital gain.

Official words by ATO

Transacting with bitcoin is akin to a barter arrangement, with similar tax consequences. Our view is that bitcoin is neither money nor a foreign currency, and the supply of bitcoin is not a financial supply for goods and services tax (GST) purposes. Bitcoin is, however, an asset for capital gains tax (CGT) purposes.

You need to keep the following records for bitcoin transactions:

  • the date of the transactions
  • the amount in Australian dollars (which can be taken from a reputable online exchange)
  • what the transaction was for
  • who the other party was (even if it’s just their bitcoin address).

Using bitcoin for personal transactions

Generally, there will be no income tax or GST implications if you are not in business or carrying on an enterprise and you simply pay for goods or services in bitcoin (for example, acquiring personal goods or services on the internet using bitcoin).

Where you use bitcoin to purchase goods or services for personal use or consumption, any capital gain or loss from disposal of the bitcoin will be disregarded (as a personal use asset) provided the cost of the bitcoin is $10,000 or less.

Using bitcoin for business transactions

If you receive bitcoin for goods or services you provide as part of your business, you will need to record the value in Australian dollars as part of your ordinary income. This is the same process as receiving non-cash consideration under a barter transaction. The value in Australian dollars will be the fair market value which can be obtained from a reputable bitcoin exchange, for example.

When receiving bitcoin in return for goods and services, a business may be charged GST on that bitcoin. If the supply of the goods and services was a taxable supply, the business will be able to claim input tax credits on the GST charged on the bitcoin they received as payment.

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Crypto Market cap reached $275 billion

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Market cap of crypto currencies reached the level of $275 Billion after a spike on 4rth July 2018, Bitcoin maintaining its dominance at 42% , making it the biggest crypto currency in the world.

Bitcoin price currently trading at around $6700 after a 3% spike in the price , making it jump from $6500 to $6700 within minutes, analysts are predicting that this recent upside movement in crypto market in weak and need to sustain these levels in order to attract more buyers, otherwise overall bearish market is still in control.

$7000 is a key level for Bitcoin 

$7000 is very important level for bitcoin according to many technical analysts, If it breaks above $7000 and stays there then chances are that upside move will be healthy, otherwise bear will look forward to take control of the situation again.

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Switzerland merging Cryptocurrencies with conventional banking

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Switzerland is on the right track to become a Crypto nation and country is making efforts to allow cryptcocurrencies to fully access conventional banking .

Bitcoin and other crypto currencies has taken a big hit in brutal bear market of 2018 but that’s not stopping Switzerland to allow cryptocurrencies to fully access conventional banking system within the country. Switzerland is currently in progress and drafting rules and regulations for such collaborations.

Heinz Tännler, Swiss expert & finance director of Zug canton, told media earlier that politicians were moving to allow crypto companies to work with banks, adding that Switzerland’s central bank, financial supervisor and federal government “are willing to help”.

He said: “We hope to clarify relationships by the end of the year at the latest.

“Time is pressing, other jurisdictions such as Malta and Singapore are very active and making a lot of effort to attract these companies. The lack of access to bank services is a significant competitive disadvantage.”

“We have to push certain national institutions to resolve this problem quickly and effectively, but that now seems to be going well.”

Blockchain becoming the global phenomenon 

The concept of Blockchain is interesting and attractive for all the countries, many countries may disagree on the existence and usage of cryptocurrencies, but all of them agree with the fact concept of blockchain is not going anywhere and governments can benefit from this technology in various fields, but if you ask any expert of blockchain, he would tell you that success of Blockchain technology has to be linked with existence of crypto currencies, without crypto currencies, and ecosystem can’t exist, many governments around the world are slowly recognizing the fact and Switzerland is definitely on the right track if they allow crypto currencies to work in collaboration with the Banks, because many banks around the world are not allowing crypto currencies to offer services through them, but this initiative will open many doors in that regards.

 

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Crypto market stabilizing gradually

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Crypto market is stabilizing around $450 billion market cap after gradual increase in overall value in recent weeks.

Leading crypto currencies are on the rise, lead by Bitcoin, Ethereum, Bitcoin Cash and Ripple. Although increase in bitcoin value is less as compared to other crypto currencies but overall market is on rise with current market of $440 billion.

Bitcoin is currently hovering around the $9300 mark after being rejected at $10000 mark couple of times in last days, Ethereum is on the charge as well but the most surprising one is Bitcoin cash. Bitcoin cash was at $600 couple of weeks ago and now at $1600, shows rapid growth in recent weeks.

EOS

Crypto currency of the month has to be EOS, investors of EOS are enjoying a massive rise in value in past few weeks, EOS started April at $5 mark and now is at $18 , value of EOS increased more than 3 times within one month.

Current top 5 crypto currencies

  1. Bitcoin : $9388
  2. Ethereum: $741
  3. Ripple: $0.83
  4. Bitcoin Cash: $1630
  5. EOS: $18.28

 

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