Crypto Double Taxation Officially Ends in Australiabr>
The Australian government has finally, officially, and formally ended its so-called “double taxation” penalty for cryptocurrencies. Under that law, citizens were taxed when they bought cryptocurrency and then again when buying items subject to taxation, in effect, paying twice.
The tax code change was passed as part of a budget bill. Under the new law, bitcoin and other cryptocurrencies will be taxed only in the same manner as foreign currencies. Any purchases retroactive to July 1 of this year will avoid the double taxation, according to a government statement.
The so-called “double taxation” issue has vexed the nascent bitcoin business community in Australia, and the government indicated earlier this year that it was willing to help in efforts to foster the digital space. Previously, consumers using digital currency were subjected to sales taxes upon purchase of the digital currency and then again on any use for purchase of goods and/or services.
In its budget summary for 2017-18, the Australian government revealed plans to make sure that the general sales tax (GST) was not paid twice. “From 1 July 2017, purchases of digital currency will no longer be subject to the GST, allowing digital currencies to be treated just like money for GST purposes. Currently, consumers who use digital currencies can effectively bear GST twice: once on the purchase of the digital currency and once again on its use in exchange for other goods and services subject to the GST.”
The move should help spur investment in the country. Several businesses left Australia in 2014 following the double-taxation imposition. “Innovation will drive productivity growth in Australia,” according to the budget summary. “The Government is committed to establishing Australia as a leading global financial technology (FinTech) hub and is announcing a new package that aims to position our local fintech industry as a world leader.”