The Australian Tax Office (ATO) released guidance on August 20, describing the tax treatment of bitcoin and cryptocurrencies with the same characteristics as Bitcoin.  The ATO guidance provides that bitcoins are neither money nor currency for Australian tax purposes, and that transacting with bitcoins is akin to a barter agreement, with similar tax consequences.  This general treatment is in line with guidance released by the IRS in Notice 2014-21, concerning the US tax treatment of virtual currencies.  The ATO guidance also specifies that Australia’s Goods and Services Tax (GST), a 10% value-added tax, is payable on the supply of bitcoins made in the course or furtherance of a taxpayer’s enterprise.  The GST, therefore, may result in the double taxation of Australian businesses that use bitcoin.

The ATO guidance can be accessed here.