ATO’s view of Bitcoin  

  • The ATO view is that Bitcoin is neither money nor a foreign currency.  
  • Transactions through Bitcoins are more likely a barter arrangement with the same tax consequences.  
  • However, Bitcoin is an asset for CGT purposes.  


Bitcoin for Personal Transactions  

  • No Income Tax or GST implications if the person simply pays for goods/services through bitcoin  
  • CGT on the disposal of Bitcoin will be disregarded- provided the purchase cost of the disposes Bitcoin doesn’t exceed $10,000.  


Bitcoin for Business Transactions  

  • When Bitcoins are used for payments/receipts relating to Business, the same must be recorded in books at the fair market value obtained from a reputable bitcoin exchange.  
  • GST credits can be availed if the provider of Bitcoin charged GST for the supply.  


Paying Wages through Bitcoins  

  • If an employee receives Bitcoins instead of Wages from the employer under a Salary Sacrifice Agreement, then the employer is subject to the provisions of Fringe Benefits Tax. In this case, the obligations to Withhold Tax & Superannuation provisions don’t apply.  
  • If there is no Salary Sacrifice Agreement, the Bitcoin payment will be treated as Normal Wages, and the employer has to comply with the PAYG Withholding Tax & Superannuation obligations.  

Entities carrying on the Business of Mining Bitcoins  

  • Expenses incurred in relation to mining bitcoins are fully deductible.  
  • Losses from mining activity can be claimed subject to the non – commercial loss provisions.  
  • Income from mining bitcoins will be assessed as ordinary income.