This week, both houses of the Australian Parliament passed a bill that will eliminate the double taxation of digital currency. After Royal Assent by the Governor-General, the bill will become an Act of Parliament, retroactively effective as of July 1, 2017.
On Thursday, October 19, 2017, the Australian Senate passed Treasury Laws Amendment (2017 Measures No. 6) Bill 2017. The Australian House approved the bill just one day earlier, on October 18, 2017. The bill now awaits Royal Assent by Australia’s Governor-General, at which time it will become an Act of Parliament. In September 2017, ETHNews reported on the introduction of the legislation.
Going into effect as of July 1, 2017, the bill will amend Australia’s tax system, ensuring that digital currency transactions are not subject to two instances of goods and services tax (GST). Previously, Australian users were subject to taxation on 1) the purchase of digital currency and 2) the use of digital currency for goods and services subject to GST.
As laid out in the bill’s accompanying explanatory memorandum, “The amendments provide that supplies and acquisitions of digital currency are generally disregarded for the purposes of GST. Consistent with supplies of money, supplies of digital currency are only recognized for the purposes of GST if the supply is made in exchange for money or digital currency.”
In essence, in Australia, digital currency will receive the same tax treatment as foreign currency. In its memorandum, the House also noted, “The measure decreases the tax and reporting burden on businesses that use digital currency.”