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How is Bitcoin taxed?
ATO QC 42159
See ATO link: How to work out and report
https://www.ato.gov.au/individuals/Investments-and-assets/crypto-asset-investments/how-to-work-out-and-report-cgt-on-crypto/
Bitcoin is taxed similarly to barter arrangements.
Bitcoin is neither money nor a foreign currency and is not a financial supply for goods and services but it is an asset for capital gains purposes.
If you use Bitcoin for personal use there is no income tax or GST implications or capital gains provided the cost is < $10,000.
If you use Bitcoin for business you will need to record the value in $AUS as part of your ordinary income the same as non cash consideration.
A business may be charged GST on that Bitcoin and claim input tax credits.
There are capital gains tax consequences where you dispose of bitcoin as part of your business after you reduce the amount by any bitcoin that you have declared as income.
If you pay an employee by bitcoin this falls under the Fringe Benefit Tax legislation.
If you are mining bitcoin this would be assessable income and trading stock.
If you are engaged as an exchange service the process will be assessable income.
If you are holding bitcoin as an investment you will be subject to capital gains legislation.
DISCLAIMER
We have clients from the following locations:
Brisbane, Albion, New Farm, Teneriffe, Newstead, Windsor,
Wilston, Bowen Hills, Wooloowin, Herston, Lutwyche, Hamilton, Eagle
Farm, Gordon Park, Fortitude Valley, Clayfield, Ascot, Hendra.
Morayfield, Burpengary, Caboolture, Bellmere, Wamuran, Narangba,
North Lakes, Mango Hill, Kallangur, Dakabin, Deception Bay, Bribie
Island, Elimbah, Kippa-Ring.
We do tax returns for individuals, trusts, companies, partnerships, contractors, ABNs and
sole traders.
The information provided in the above documents is not intended to
be, nor should it be construed as tax advice. Any specific
recommendation for a client can only be done after their individual
circumstances have been determined by David Douglas Accountants.
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