Topic: Australian tax department discussing Bitcoin tax without consulting CCCB (Read 7955 times)

I think forcing tax on Bitcoins might set a dangerous precedence - then it will become regulated and centralized like worthless fiat currency (printed form thin air) is. If it ever happened here in New Zealand, I'd probably lose interest in Bitcoins - I don't want to promote anything that is controlled by a government or government-controlled authority.

Do people think that countries around the world can be serious about regulating Bitcoins like fiat currency? If so, we need to stand up and say no!

Whats the go with giftcards purchased with bitcoin? I guess these businesses could be audited by the ATO. However gyft.com in the US as far as I know is all done online so no sending a physical gift card to an address.

Also if I bought a few bitcoins at $130 on an exchange via credit card etc and then cashout later via some other service at $1k each or so what sort of tax will that attract?

So many unanswered questions. Really murky waters at the moment.

Treat as asset to be conservative unless you were trading. If trading, you must show it is a hobby and not systematic. If systematic then pay full taxes. IMHO, best not to spend btcs.

Acid test is country of domicile.

I have no further insight to add - but how did it work for people in previous years? I imagine that people sold decent amounts of Bitcoin last financial year, and maybe even the FY before that too.

What if the ATO hasn't made any decision by mid 2014. Do you simply just put it down as CGT, or do you not declare anything as the ATO has not been able to provide advice on what Bitcoin is?

Also, on a related topic, is it possible to move to New Zealand for a year, sell Bitcoins there (as they have no CGT), then move back here with your money? Being out of Australia for a year means you won't be an Australian for tax purposes.

So... where are we with the CCCB and the ATO?

I've been consulting with a well respected tax firm (who have also sought information from a variety of other sources) and at present they cannot offer me any solid answer on how the ATO think btc->fiat transactions will be viewed. 

They recommend if I was to cash out any btc to hold $46% in a term deposit and wait until May the following year (deadline for accountant submitted tax returns) and hope that the ATO has a decision before then... if they go down he CGT route then only pay 23%.

Anyone else got anything more solid?

Haha OP you so crazy! The ATO better not make any decisions without consulting you! What are they thinking‽

Seriously see a professional. 

A 'Central Bank' for a decentralised currency ...

hmmmmm 

And if you're not trolling, please never attempt to represent me or the australian crypto community again.
What qualifications or experience to you have that you feel justifies appointing you as the head of a central bank for a decentralised system like this?

I'm pretty sure he's just trolling. Nothing about it in Australia being mention. Few of us that are involved in the Australian market place are watching out for news like that and haven't heard anything.

Bitcoinpro i do hope you are just having a troll. I would hate to think you were actually serious and messing with the gov and stuff.

Yep, OP a crazy

who cares what he is claiming to be. the point here is bitcoin and the Australian tax department.
i am very keen to hear what they have to say about bitcoin because it will have a huge impact on bitcoin in Australia. I have no interest in hearing about weather or not this person's title is real or not. I think some people on here just post anything to build up their post count.let's try keeping this about Australian tax law and bitcoin now.

This approach seems completely counter to Bitcoin's decentralised nature. I'd be very suspicious of any organisation claiming to represent bitcoins, especially with the word 'central' in its title.

It looks to me like people are using bitcoin to gamble on its price with this kind of volatility we're seeing.


In-kind payments / Barter - from the ATO website:
I don't see how a barter definition for Bitcoin could work to their advantage as far as taxing goes

Foreign currency - probably not as Bitcoin would need to be formalised into an ISO standard.

Are you sure its going to be good for the BTC world by speaking to the Government, ATO and media about the "bank" you have just setup ?
Considering the only information about your bank appears to be a couple of threads asking if people want to join and you appointing yourself the president.

Also I'm no legal expert.. but don't you need some kind of license or what not to setup a bank. Shouldn't you register the bank as an actual business or financial institution ?

Assuming the people you contacted actually take you seriously and look into the CCCB they are going to think BTC users are morons. Luckily isn't to far from the truth in some cases

don't mention it

As president of the CCCB I'm sure you have many pressing issues to bother you.  I feel oddly flattered that you can turn your attention from global financial markets to my mental wellbeing even if its only for a few short minutes.

Thank you.

just because I've setup the CCCB?

please

Read the thread.  Many of the replies are comments on your sanity or lack thereof.  I personally have no idea if you have mental health issues but you do give people that impression.

nonsense, and off topic

Its not just you.

Uhh is it just me or does the OP seem like he's a few sandwiches short of a picnic?

Good luck...

Uhhh yeah - please don't try and represent me as an Australian in any way, I'd much prefer to be on my own considering your 'letter'.

have sent of a mail to the ATO from the CCCB

it will be online soon Ill let you know if there is any major delays

I imagine the CCCB has an advanced and sophisticated designer website befitting the torch-bearer of the global digital age...

the australian tax office cannot be contacted by email  

have written an email to them and its seems as though i cannot send it

they want me to use snail mail on a topic like bitcoin that is a leading edge technology of the internet  

http://www.ato.gov.au/

what are you trying to do ?
like what is the goal here ?

You should also try use "I" instead of "i" when writing form letters... and spell check

If the ATO can prove I made bitcoins from anything other than satoshidice then good luck to them....

as mentioned earlier and in my pledge to make the CCCB as transparent as possible when acting in my capacity here is a copy of the letter i sent to a government minister in Australia this week

Greetings  i am writing to bring to your attention the new age in currency,

being heralded by Crypto Currencies with the lead currency being Bitcoin, these digital currencies

are made through thousands of strong computers linked together in a peer network using

CIA/NSA Cryptography to make uncrackable encryptions that are used to store value.

Having been a very early adopter of Bitcoins and this technology i have gone about the process of

setting up the Crypto Currency Central Bank a Global organisation with myself as the President.

Now for the main purpose of this letter I need your help, my plan is to amalgamate the CCCB

with the Australian government and Reserve Bank also joining along side the Central Banks around

the world including the World Bank.

This is not a half hearted endevour the global bitcoin community is awaiting our response and

any regulation would also include taxation for the Australian government.

Can you please consult the relevant parties be they one of the senators or Federal Goverment

Employees like reserve bank members including Mr Swan, i shall keep in close contact and look

forward to big things!

Really cool if you're receiving BTC as a merchant in return for goods and/or services, but what about the humble PAYG earner?

Yes you do. In Australia, the "transaction medium" is priced at market rates.  Think Barter Card.

Real World Example:  I received 5 BTC at ~$48 AUD per BTC ($250).  I sell 3 BTC  at $70AUD/ BTC  not long after.

I declare the full $250 as income and keep the 2 BTC.  I declare the 2 BTC as part of a "cash on hand/ float" asset at the market rate*.
Any losses or profit I make when I convert the 2 BTC to $AUD is then entered as profit or loss.

* I get to choose the rate.  Because it's the wild west (no benchmark pricing) I choose the "best price" for the reporting period.

What about purchases with bitcoins?  Say your bitcoins have risen in value 2000%, you now have enough value to purchase a house or a car.  You find a seller that is willing to accept BTC for their house/car, what taxes would the buyer be liable for?

Ironically - if bitcoin is defined as a currency, then the price go up because of the added legimacy. If Bitcoin is considdered tax-free gamblimng, the price goes up because of the tax-break(and added legimacy).

My business has been accepting bitcoin since late 2011.  All bitcoins have been declared for income and GST (consumption tax e.g VAT for the uninformed) purposes and I have had no issues at all. 

The trading of bitcoin for speculation purposes is still up in the air.  Gambling income in Australia is tax free.

So they have to make a decision soon.  If bitcoin is a real currency, then tax must be paid on capital gains, if not, let the bots begin!!!!

You should probably learn to use your shift key if you plan to issue media releases.

Australians concerned about how Bitcoin will be taxed can ask for an individual ruling from the ATO.  If you have an individual ruling, the ATO is bound to honour it for that financial year even if the ATO's eventual decision on how to treat something for tax purposes in general is at odds with that ruling.  They basically have no recourse against you if they get it wrong (bear in mind that Australia works on self-assessment so the onus is usually in the taxpayer to get it right).

Different taxation issues will arise for different Bitcoin users.  Following the advice of a tax agent does not protect you from liability if your tax agent gets it wrong.

For a while i thought i was the only one that had no idea...

who are you?

Uhhhh. what?

i don't think they can tax directly BTC but fiat that is bought by btc, is this the case?
the only coin i know with integrated "tax" (demurage) is FRC and this tax returns to miners!

umm is the CCCB a real thing... ?
and why would the ATO/government need to run it by you and this bank ?

*edit* read some of your posts... not sure if serious.......

Thanks for the info, was wondering how long it would be before they wanted to get their dirty little bum scratchers on our investments.

You may just fly a little kite and ask them if there will be a facility to offset any losses against taxable income too.
IE, suppose my investment in BTC at the 30th of June 2013 = $AUD 2000, but due to the massive market valuations my portfolio value = $AUD 1000.

Seems to me if they want the benefit of the gains then they can wear the losses as well, share and share alike.

Oh? The Australian kleptocrats want to steal more from people?

I'm shocked! 

Your welcome, have an email i sent last week that i will post later, was waiting for the reply from the minister before I put up the initial email but its seems that this press release has preempted that.

Thanks for the info. Hopefully they don't try and backdate anything.

After seeing a press release in the Australian media regarding the Australian Taxation office looking at Bitcoin for Tax purposes which i know they have done because ive been contacting government officials, Ive rung the relevant media outlets to say nothing goes to press without consulting the CCCB and any tax laws or even considering tax laws by the Australian Taxation department must be done in collaboration with the CCCB (Crypto Currency Central Bank) with my position being president, i will keep everyone here informed as to developments. They said they will be calling me back Monday!

Their is no problem with the press releasing information about bitcoin but if it has to do with rules and regulations it will be the CCCB that will take charge!!!

Here is the Press release in full:

The Australian taxation office says it does not know if profit earned from trading in bitcoin, the online digital currency, should be taxed. Interest in bitcoin has surged in recent weeks, giving investors a wild ride. Its value has risen from $15 at the start of the year to $266 last week before slumping to about $126 yesterday.

While the digital currency is attracting growing interest from conventional investors - trading frim IG markets has launched a service allowing clients to bet on movements in its value - the ATO is still carrying out a review.

We are currently considering the tax implications of digital currencies, " the tax office said.

The tax office will also need to consider whether purchases paid by bitcoin - which is under the control of no government or central bank - are regarded as barter, in-kind payments or payments in a foreign currency.

Foreign currency is considered a capital gains tax asset by the ATO. But even if the taxman decided bitcoin is not a currency, capital gains tax could still apply.

Melbourne University tax law professor Miranda Stewart said if Bitcoin holders were deemed to buying rights to the computer code that comprised the virtual currency, it could be considered an asset subject to capital gains tax.