Reading: Bitcoin in Australia: TAXED!

Bitcoin

Bitcoin in Australia: TAXED!

Bitcoin

Bitcoin in Australia: TAXED!


According to the news I received, Bitcoin will be taxed in Australia. The Spokesperson for the Australian government explains it as such: “A transfer of Bitcoin from one entity to another is a ‘supply’ for GST purposes. Basically, there is a supply/demand and as such it is liable for taxation. The exclusion from the definition of supply for supplies of money does not apply to Bitcoin because Bitcoin is not ‘money’ for the purposes of the GST Act.

map_of_australia“We see Bitcoin as a legally recognised universal means of exchange and form of payment by the laws of Australia or the laws of any other country. Since it is not ‘currency (whether of Australia or of any other country)’ under paragraph (a) of the definition of ‘money’.”

Now this means a serious blow for businesses and consumers alike that are using Bitcoin in Australia. This ruling means that all Bitcoin transactions will be more complicated. The government of Australia is forcing sellers that accept the currency to treat it as a “taxable supply,” rather than simply money exchanged for goods and services. If it walks like a duck, quacks like a duck than it is a duck.

Australia’s officials supporting the ruling shows us how little they know what money really is and sorely lacks the comprehensive qualities of the history of money. Agreed the link I’m inserting is not entirely accurate but it will suffice as an example. For them money is just something that is created by the state. There are many instances in history where this hasn’t been the case or that other payment options were available. From the seashell money systems to the bar money (bars of Iron or precious metals that were used in the Greek-Roman communities and the surrounding areas), history has provided many examples of non-state money.

So what is money really? In the broadest sense it is a payment method for services rendered or for receiving goods that have been negotiated for a certain amount. Now here is another link, though I do not agree with the last sentiment of the conclusion. We have seen that the Central bank can print more money if it is ordered to.

BITCOIN_12So what does this “tax” mean for our Bitcoin brothers and sisters in the exotic Australia? According to some interpretations, the ruling mainly applies to Australian businesses that are running Bitcoin exchanges. The exchanges, which let customer’s trade real money for the digital currency, will be especially hit by this tax. However, doesn’t this also mean EVERY business that accepts Bitcoin as a payment method can be liable for this tax? It is all quiet from the Australian front on this particular burning question.

This is a strange move by the Australian government and kind of contradicts their stance from previously announced official messages. It is also noteworthy that general sales tax does not usually apply to financial transactions. What will the future hold for Bitcoin? Only time will tell but what if a country, say the UK or China for example do proclaim that Bitcoin is “money”? what will the Australian government do then?

So what do you think about this latest development? Do you think it is a sneaky move on the Australian government part to cash in on the rising popularity of Bitcoin? What would you propose the Australian government had done?

Photo Sources: 1, 2

 

 


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