In a decision that is fairly unsurprising to the cynical, the ATO has motioned in their long awaited guidelines on crypto-currency that Bitcoin and similar currencies will not be recognised as money in transactions made on Australian shores.
The non-denominational, largely ethereal method of payment has been touted by businesses and economists alike for its unique qualities in a world of volatile nationalised economies. The ATO doesn’t really seem to care about this aspect of it as, under the new rulings, anyone who dabbles in the ‘coin will have to pay double GST; once on the Bitcoin itself and again on the services it is applied to.
Right now, only about 1000 businesses in Australia offer transactions with Bitcoin and it’s likely any hope of the virtual payments bolstering our palpable economy will depart alongside online entrepreneurs taking their Bitcoin-friendly enterprises elsewhere to more progressive countries.
If that’s not bad enough, the ATO have decided to backdate the ruling…back to Bitcoin’s creation…in 2009. So if you were doing something legally untaxable with cryptocurrency back then that has since garnered an excess of $10,000 AUD, expect a knock on the door.
ATO’s Michael Hardy said in an interview with ABC News that the decision was made to comply with existing legal definitions of currency and to avoid tax dodging. How exactly you’d dodge paying any kind of significant tax on currency you can only use at 1000 businesses across an entire country is still unclear.
Have fun with your new-fangled ‘non-cash barter transactions’, kids. Just be careful.