The Australian Tax Office (ATO) decided that bitcoin would be considered an intangible asset, which would double tax bitcoin. This was to be a huge inhibitor for bitcoin businesses operating within Australia’s jurisdiction.
The main question that always surrounded the tax treatment of bitcoin was its legal characterisation. According to its guidance, the ATO was of the view that the digital currency is a legal form of property. From this flowed bitcoin’s tax treatment.
At the time the ATO had taken the view that bitcoin is a taxable supply for GST purposes. This created a fair amount of concern to those offering bitcoin as a means of payment. In the instance where they hold bitcoin and then wish to exchange it for fiat currency ‘double GST’ could have been applied.
“In many ways the guidance has brought clarity to the position of bitcoin users in Australia. However, we don’t believe the ATO’s guidelines are ideal for bitcoin in this country. We believe in a simpler financial system, and we will continue work with the ATO to help them discover a fairer position.”
CoinJar appears to have made every effort to be compliant with the original guidance, however, the ATO’s ruling proved enough for the company to incorporate overseas. “On 1 December 2014, CoinJar relocated our headquarters to the United Kingdom as part of a global expansion that will provide customers more freedom to buy, sell and use bitcoin as a global digital currency. We are now officially incorporated as a UK company, CoinJar UK Limited, and have taken up residence in London’s financial district,” said CoinJar
According to the company’s announcement, the move away from Australia would not only catalyse the growth of CoinJar, but their customers would no longer be subject to
Originally appeared at: http://bravenewcoin.com/news/australia-changes-bitcoin-direction/