Topic: Hmmm -- is this the end of BTC in AUS? !! Furious !! (Read 3413 times)
Bitcoin is however you use it. It can be just another way to store value, like metals, or it can be used as actual currency. The more merchants, the more usage as currency it will have tho. Bitcoin is uncorruptible and no goverment can tell "what it is" or how you use it.
I made a petition on the GST issue. Please share it around and sign!
http://www.change.org/p/treasury-of-the-australian-government-make-australia-a-bitcoin-friendly-country
http://www.change.org/p/treasury-of-the-australian-government-make-australia-a-bitcoin-friendly-country
Maybe this new development will actually increase usage in AUS. Especially if everyone is compliant and legal and all that.
Legitimate business already comply with existing rules and regulation.
Making btc comply with the law is not really that difficult. I don't see how this will end btc usage in Australia.
Making btc comply with the law is not really that difficult. I don't see how this will end btc usage in Australia.
http://www.cryptocoinsnews.com/news/australia-bitcoin-tax-good-average-joe/2014/08/21 possible good news... guys we should comment .. check the last paragraph on article.. ato will look to asjust things on the draft after listening to the btc community all we can do is hope.
and if a normal average joe has to pay gst when buying bitcoin under 10k that cleary doesnt make it good for average joe. lets comment like there is no tomorrow and it will be passed onto ato check link last paragraph for comment instructions... do not let this slide.. its either we fork the ato draft now or it will be too hard later.
and if a normal average joe has to pay gst when buying bitcoin under 10k that cleary doesnt make it good for average joe. lets comment like there is no tomorrow and it will be passed onto ato check link last paragraph for comment instructions... do not let this slide.. its either we fork the ato draft now or it will be too hard later.
If you have to pay tax on BTC earnings and you are mining BTC can you therefore claim the expense as a tax deduction?
Yes, generally speaking, all expenses related to earning the income are deductible.
It's in every country different. But profit from trading in most should be treated like trading in commodities.
Mining is more like an industry so your equipments are machines/inventory.
Mining is more like an industry so your equipments are machines/inventory.
If you have to pay tax on BTC earnings and you are mining BTC can you therefore claim the expense as a tax deduction?
Bitcoin is perfect as assetclass and it does nothing bad. It only confirms regulators accepting it then more businesses will get involved because now it's clear how to do taxes.
ok so at the BTC Barcamp earlier this year we had the benefit of a Tax Lawyer/?Barrister from one of the large law firms give a view as to tax. They guy was very professional and up their with the best.
If I recall he was of the view that due to the defn of money the tax office would have to do the double taxation.
However as long as the BTC were purchased from and O/S source there would be no double taxation or even GST. So the work around is the Australian BTC sellers eg coinjar have to hold the BTC they sell on a computer/server outside of Australia. Given whay bitcoin is it is ideally suited to this as the bitcoin is given via the blockchain.
This was due to a High Court Case and tax on cigarettes if memory serves.
So that's the work around for that.
If I recall he was of the view that due to the defn of money the tax office would have to do the double taxation.
However as long as the BTC were purchased from and O/S source there would be no double taxation or even GST. So the work around is the Australian BTC sellers eg coinjar have to hold the BTC they sell on a computer/server outside of Australia. Given whay bitcoin is it is ideally suited to this as the bitcoin is given via the blockchain.
This was due to a High Court Case and tax on cigarettes if memory serves.
So that's the work around for that.
By the way the $10k cost base CGT tax exemption on Btc is for personal use only. This implies you must actually spend the Btcs on goods and services down the track. If you buy Btcs, keep it and then sell it down the track - they could argue this was an investment purpose and the exemption might not apply. But if you buy a lambo, then it appears you would be fine:
From here: http://law.ato.gov.au/atolaw/view.htm?DocID=DXT/TD2014D12/NAT/ATO/00001 '
Get a private tax ruling if in doubt.
Raises many questions:
1. If buying a bottle of wine and aging it for 10 years before consumption is okay - then can't I be "maturing" my Btcs before "consuming" them by buying goods and services?
2. Is buying Btcs for spending in retirement "consumption" or "investment"?
3. Is buying Btcs and then buying a house with it "consumption" or "investment"?
4. What if I sold my Btcs then bought a house with it? Is that "consumption" or "investment"?
5. Is there a one year deadline for spending Btcs that have been purchased? I don't see that written anywhere in the personal use asset definition that consumption must happen within a one year period.
Edit: writing to the ATO for clarification now.
Quote
17. Under subsection 118-10(3) of the ITAA 1997, a capital gain made from a personal use asset (a CGT asset used or kept mainly for personal use or enjoyment)13 is disregarded if the first element of the cost base is $10,000 or less.14 In addition, any capital loss made from a personal use asset is disregarded under subsection 108-20(1) of the ITAA 1997.
18. This Draft Tax Determination is not intended to define the circumstances in which Bitcoin would be a personal use asset. Bitcoin is not kept or used for personal enjoyment. Bitcoin that is kept or used mainly for the purpose of profit-making or investment, or to facilitate purchases or sales in the course of carrying on business is not used or kept mainly for personal use. Bitcoin that is kept or used mainly to make purchases of items for personal use or consumption ordinarily will be kept or used mainly for personal use. Other categories of use conceivably could exist; taxpayers in these cases should seek private rulings.
18. This Draft Tax Determination is not intended to define the circumstances in which Bitcoin would be a personal use asset. Bitcoin is not kept or used for personal enjoyment. Bitcoin that is kept or used mainly for the purpose of profit-making or investment, or to facilitate purchases or sales in the course of carrying on business is not used or kept mainly for personal use. Bitcoin that is kept or used mainly to make purchases of items for personal use or consumption ordinarily will be kept or used mainly for personal use. Other categories of use conceivably could exist; taxpayers in these cases should seek private rulings.
From here: http://law.ato.gov.au/atolaw/view.htm?DocID=DXT/TD2014D12/NAT/ATO/00001 '
Get a private tax ruling if in doubt.
Raises many questions:
1. If buying a bottle of wine and aging it for 10 years before consumption is okay - then can't I be "maturing" my Btcs before "consuming" them by buying goods and services?
2. Is buying Btcs for spending in retirement "consumption" or "investment"?
3. Is buying Btcs and then buying a house with it "consumption" or "investment"?
4. What if I sold my Btcs then bought a house with it? Is that "consumption" or "investment"?
5. Is there a one year deadline for spending Btcs that have been purchased? I don't see that written anywhere in the personal use asset definition that consumption must happen within a one year period.
Edit: writing to the ATO for clarification now.
i think there is a loophole bro or they found out something we dont know.. i spoke with cointree and they said for me not to worry it will be business as usual for MOST.. before i got that reply i told them that if normal consumers have to pay 10% ontop of other fees they may as well give up and adoption will take a big step back in AUS; so this is when they replied "you dont have to worry it will business as usual for most" all we can do now is hope boys n girls 
wait a minute, I might have read things wrong and my feelings are changing to , Thank goodness!
Let me get this straight, as per comments on reddit and all over the place.
I am a normal average Joe, I do not run a business and I only want to purchase Bitcoin to buy some products from NewEgg ....
I visit Coinjar.com, Cointree.com or igot.com as an Example, I then log into my account and say I want to purchase 2 x BTC for personal use.
Do these Exchanges Charge me 10% GST on these bitcoin that I buy of them? (Remember I am only a person of the street wanting to buy some BTC so I can purchase some online goods for Under $10,000) <<< This is the golden make or break question.
Yes, as it stands you would pay 10% GST. If you buy 1 bitcoin at an exchange rate of AUD$500, your total price would be AUD$550.Let me get this straight, as per comments on reddit and all over the place.
I am a normal average Joe, I do not run a business and I only want to purchase Bitcoin to buy some products from NewEgg ....
I visit Coinjar.com, Cointree.com or igot.com as an Example, I then log into my account and say I want to purchase 2 x BTC for personal use.
Do these Exchanges Charge me 10% GST on these bitcoin that I buy of them? (Remember I am only a person of the street wanting to buy some BTC so I can purchase some online goods for Under $10,000) <<< This is the golden make or break question.
Well then that removes ALL the normal consumers out of Bitcoin, in all of Australia if thats how it stands... This Guys OzzyCoin on reddit seems like he says no, only if you are a business buying from an exchange you are to pay GST on it, not if your buying it for personal use and non-business, Exchanges will have to create 2 Buying options, 1 = Business Buys 2 = Individual Personal buys
If he is correct, then the ruling is actually pretty good
http://www.reddit.com/r/Bitcoin/comments/2e1wpm/ato_tax_ruling_australia/
Check ozzycoin comments
Again - If normal people have to pay 10% GST just to get into bitcoin ROFL, there is no way in HELL ANYONE would be stupid enough to buy bitcoin, at the moment it is already a hassle to get Bitcoin, and ontop of the hassle charge 10% Ontop and then again when you purchase a product from australia ROFLLLLLLLLLLLLLLLLLLLLLLLL Are these tax idiots dreamin or what? I cannot beleive that is the case for normal users, they basically just spat in the face of everyone in australia and said "YEH!! you want to buy BITCOIN?? OK DO IT , But you going to GIVE US 10% Twice if you do , So suck a big fat one HA HA HA
I wonder if any non Australian businesses will setup offices in Australia to circumvent money transmitter rules in their own countries, just as multinationals now shift money around to avoid paying tax?
The other side of the coin: This opens the trading for everyone
If categorized as money, then buying and selling bitcoin will need some money transmitter license and follow many anti-money laundering and other laws for finance institutions. That will make normal people more difficult to buy bitcoin
If categorized as capital goods, if you buy and hold, you never pay tax
If categorized as money, then buying and selling bitcoin will need some money transmitter license and follow many anti-money laundering and other laws for finance institutions. That will make normal people more difficult to buy bitcoin
If categorized as capital goods, if you buy and hold, you never pay tax
nailed it.
Stupid regulators,
Also looks like the guidance says for <$10000, there wont be capital gain tax.
The other side of the coin: This opens the trading for everyone
If categorized as money, then buying and selling bitcoin will need some money transmitter license and follow many anti-money laundering and other laws for finance institutions. That will make normal people more difficult to buy bitcoin
If categorized as capital goods, if you buy and hold, you never pay tax
If categorized as money, then buying and selling bitcoin will need some money transmitter license and follow many anti-money laundering and other laws for finance institutions. That will make normal people more difficult to buy bitcoin
If categorized as capital goods, if you buy and hold, you never pay tax
Guys,
Good News!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I spoke to one of my favorite Exchanges.... www.cointree.com
They said It will be business as usual the the MAJORITY of individuals, meaning ALL IS GOOD!!!!!!!!!!!
They will release a notice soon.
I think there is a legal loophole around this, even Ash from Coinjar said that "there is away around this regime" to ABC News...
Either that, or they called ATO to get more clarification. who knows.... what they said to me eased my pain..
Good News!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I spoke to one of my favorite Exchanges.... www.cointree.com
They said It will be business as usual the the MAJORITY of individuals, meaning ALL IS GOOD!!!!!!!!!!!
They will release a notice soon.I think there is a legal loophole around this, even Ash from Coinjar said that "there is away around this regime" to ABC News...
Either that, or they called ATO to get more clarification. who knows.... what they said to me eased my pain..
I cant wait till people start fucking them up, RARRRGHHHHH CNTS!!!!!
Bro...
Have a read of my post above yours, and all the examples they put forward, this is from the ATO.
Does this mean that a normal NON-business Non GST registered person.. wanting to buy a Bitcoin from an exchange which are GST registered, need to actually pay GST on the bitcoin he purchases of the exchange?
You must read my post which was copied from the ATO to see what I mean.
PS -- -FoR those who don't know GST = 10%
Bro...
Have a read of my post above yours, and all the examples they put forward, this is from the ATO.
Does this mean that a normal NON-business Non GST registered person.. wanting to buy a Bitcoin from an exchange which are GST registered, need to actually pay GST on the bitcoin he purchases of the exchange?
You must read my post which was copied from the ATO to see what I mean.
PS -- -FoR those who don't know GST = 10%
Yes the way I read this if a "consumer" namely non GST registered person were to purchase XBT from an exchange in Australia they would be subject to GST. This is the bait for the government. The trap in which the government falls is when the "consumer" sells XBT in Australia either for AUD or even better still in exchange for goods or services subject to GST. My point is that this consumer now has a very strong incentive to 1) Register for the GST or 2) purchase XBT outside of Australia or 3) both in order to avoid and / or evade the GST.
By the way I have been following this GST/VAT issue with XBT for well over two years. Here a post in early 2012 on the situation in Canada:
First the disclaimer: I am not a lawyer
The question here is whether Bitcoin is subject to the Good and Services Tax (GST) in Canada. The GST is the Canadian version of a value added tax. The relevant legislation is the Excise Tax Act http://laws-lois.justice.gc.ca/eng/acts/E-15/page-94.html#h-71. It may come down to whether Bitocin is considered "money" which is defined in the act as follows:
There is probably a good case here under "and other similar instrument" for the position that Bitcoin is "money" and therefore not subject to the GST, given that its purpose is its use a medium of exchange in trade.
The question here is whether Bitcoin is subject to the Good and Services Tax (GST) in Canada. The GST is the Canadian version of a value added tax. The relevant legislation is the Excise Tax Act http://laws-lois.justice.gc.ca/eng/acts/E-15/page-94.html#h-71. It may come down to whether Bitocin is considered "money" which is defined in the act as follows:
Quote
“money”
« argent »
“money” includes any currency, cheque, promissory note, letter of credit, draft, traveller’s cheque, bill of exchange, postal note, money order, postal remittance and other similar instrument, whether Canadian or foreign, but does not include currency the fair market value of which exceeds its stated value as legal tender in the country of issuance or currency that is supplied or held for its numismatic value;
« argent »
“money” includes any currency, cheque, promissory note, letter of credit, draft, traveller’s cheque, bill of exchange, postal note, money order, postal remittance and other similar instrument, whether Canadian or foreign, but does not include currency the fair market value of which exceeds its stated value as legal tender in the country of issuance or currency that is supplied or held for its numismatic value;
There is probably a good case here under "and other similar instrument" for the position that Bitcoin is "money" and therefore not subject to the GST, given that its purpose is its use a medium of exchange in trade.
and my comments in 2012 regarding VAT in Sweden (Another government that apparently has swallowed the bait)
I have tried to sort out what applies regarding Bitcoin and VAT in Sweden and since some of the rules regarding VAT are harmonized within EU I thought that I'd share this in order to get some feedback from other EU citizens. These are my conclusions (I'm not an expert in this field so feel free to point out any errors or terms that I use incorrectly):
* Finansinspektionen ("Financial Services Authority"?) in Sweden tell me that they do not consider Bitcoin a currency.
* The Swedish Tax Agency tell me that I should treat Bitcoin as an "electronic service".
Everything that is delivered electronically is considered a "service" instead of a "commodity", there are a few differences in taxation but I don't think that's what's important here. What's important is that since Bitcoin is not considered a currency a purchase with bitcoins will be considered barter. In barter, one should look each transaction separately so that if e.g. a customer (private individual) buys a table from a company and pays with bitcoins these 2 transactions should be considered:
1. The customer bought a table from the company
2. The company bought some bitcoins from the customer
I the first transaction VAT is added by the company and recorded as output VAT. In the second transaction there is no VAT since the purchase is from a private individual. Later when the company wants to get rid of the bitcoins this will be considered a sale of bitcoins (regardless of whether they are exchanged for some currency or if something is bought using them) and then VAT should be added to the sale and recorded as output VAT.
From what I can understand this is a bit problematic. It will be hard for the company to exchange the bitcoins since they must add VAT (in Sweden this is 25%) to the "sale". No private individual will buy at that price since they can buy from eachother with no VAT. Some other company could possibly buy them since they can deduct the VAT but at some point some company will have to return the bitcoins to an individual.
Have other people in the EU reached similar conclusions? If my conclusions are correct it is a pretty big obstacle in getting merchants to start accepting Bitcoin.
For Swedish readers, I have started a similar topic in Swedish at bitcoin.se.
* Finansinspektionen ("Financial Services Authority"?) in Sweden tell me that they do not consider Bitcoin a currency.
* The Swedish Tax Agency tell me that I should treat Bitcoin as an "electronic service".
Everything that is delivered electronically is considered a "service" instead of a "commodity", there are a few differences in taxation but I don't think that's what's important here. What's important is that since Bitcoin is not considered a currency a purchase with bitcoins will be considered barter. In barter, one should look each transaction separately so that if e.g. a customer (private individual) buys a table from a company and pays with bitcoins these 2 transactions should be considered:
1. The customer bought a table from the company
2. The company bought some bitcoins from the customer
I the first transaction VAT is added by the company and recorded as output VAT. In the second transaction there is no VAT since the purchase is from a private individual. Later when the company wants to get rid of the bitcoins this will be considered a sale of bitcoins (regardless of whether they are exchanged for some currency or if something is bought using them) and then VAT should be added to the sale and recorded as output VAT.
From what I can understand this is a bit problematic. It will be hard for the company to exchange the bitcoins since they must add VAT (in Sweden this is 25%) to the "sale". No private individual will buy at that price since they can buy from eachother with no VAT. Some other company could possibly buy them since they can deduct the VAT but at some point some company will have to return the bitcoins to an individual.
Have other people in the EU reached similar conclusions? If my conclusions are correct it is a pretty big obstacle in getting merchants to start accepting Bitcoin.
For Swedish readers, I have started a similar topic in Swedish at bitcoin.se.
There is a very critical flaw in this argument especially in the case of Sweden. The "private individual" is no longer a consumer but is in fact a business that is selling Bitcoin and has to register for VAT. Sweden has in fact one of the lowest minimum thresholds for VAT/GST registration in the OECD http://www.oecd.org/dataoecd/12/12/34674438.xls at 30000 SEK or approx 840 BTC at current rates! In a Bitcoin only economy every transaction would have equally compensating input and output VAT credits and equal amounts of VAT charged by each party effectively negating the VAT.
The bottom line if that if the tax authorities choose to treat Bitcoin as a "digital service" they have essentially created a huge loophole for VAT avoidance simply by registering for VAT and then using Bitcoin for every transaction.
I made my case that trying to collect GST or VAT on XBT or other crypto-currencies will lead to rampant GST/VAT avoidance and / or evasion back in early 2012. Canada has not to this point fallen into this trap (I believe thanks to the broad definition of money see my quote above), the United Kingdom fell into the trap and escaped, Sweden is trying to push the whole of the EU into this trap http://www.coindesk.com/europe-inches-towards-decision-bitcoin-vat/ and Australia has swallowed the bait. The point is that GST/VAT are by design consumption taxes and trying to collect them on something that is not consumed simply does not work.
wait a minute, I might have read things wrong and my feelings are changing to , Thank goodness!
Let me get this straight, as per comments on reddit and all over the place.
I am a normal average Joe, I do not run a business and I only want to purchase Bitcoin to buy some products from NewEgg ....
I visit Coinjar.com, Cointree.com or igot.com as an Example, I then log into my account and say I want to purchase 2 x BTC for personal use.
Do these Exchanges Charge me 10% GST on these bitcoin that I buy of them? (Remember I am only a person of the street wanting to buy some BTC so I can purchase some online goods for Under $10,000) <<< This is the golden make or break question.
Yes, as it stands you would pay 10% GST. If you buy 1 bitcoin at an exchange rate of AUD$500, your total price would be AUD$550.Let me get this straight, as per comments on reddit and all over the place.
I am a normal average Joe, I do not run a business and I only want to purchase Bitcoin to buy some products from NewEgg ....
I visit Coinjar.com, Cointree.com or igot.com as an Example, I then log into my account and say I want to purchase 2 x BTC for personal use.
Do these Exchanges Charge me 10% GST on these bitcoin that I buy of them? (Remember I am only a person of the street wanting to buy some BTC so I can purchase some online goods for Under $10,000) <<< This is the golden make or break question.
What australia did was take away the 'currency' aspect of bitcoin turning it into an investment property.
if i wanted to buy from newegg using bitcoin to get the 10% promotion discount on their products would be pointless because australia government would get the 10%.
i read that australia was now using unemployed kids as forced labor sweat shop workers with the introduction of their new green army.
australia also sent their pm to china to tell china they are open for business in preparation for the usd reserve currency demise.
What happens to Australians who buy bitcoins from another country, like say, in Japan or the Philippines? (They're close enough you could talk to someone there, or you could take a quick vacation and actually do business with an exchange.)
What happens if no one else knows about the transaction? Or to rephrase that, how would the Australian government know if you bought bitcoins?
What happens if no one else knows about the transaction? Or to rephrase that, how would the Australian government know if you bought bitcoins?
GST only applies to local tx. Just like when you buy digital product online(from shops outside of AU) = no GST.
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