Bitcoin users take note: not only will the Australian Taxation Office be taxing Bitcoin transactions this year; they’ve been taxable since inception.
A Tax Office spokesperson says Australia’s Income Tax Assessment Act 1936 is “independent of references to particular currencies”.
That means that if you’ve made money investing in Bitcoins anytime since the currency was introduced in 2009, you should be prepared to be taxed on your gains.
Here’s what the ATO says:
“The tax legislation that applies to conventional commercial transactions also applies to transactions undertaken via the internet or with emerging payment systems.
Paying for goods and services with new types of payment tokens still means that the seller may need to account for GST or include the income in their business tax return.
The buyer may also need to keep records of the value of the purchase if it represents a business expense or if the purchase is an asset which may be subject to a capital gain or loss.
The value used by the buyer and the seller in these transactions needs to be identical and consistent with market prices.
It is most important that people engaged in any type of transaction with Bitcoin or other payment systems keep detailed records and evidence about what trades they make and the source of any assumptions about the value of any transaction in Australian dollars.
This will minimise the risk of there being a difference of opinion between a taxpayer and the ATO over the correct valuation and treatment of a transaction for taxation purposes.”