The Government has released exposure draft legislation and explanatory material for amendments removing the double taxation of digital currency where digital currency refers to “fungible digital units of consideration, that do not have a value based on the value of any other thing or associated entitlements.”
As discussed in our Budget update, the proposed change means that digital currency will be treated like money for GST purposes, making it easier for digital currency businesses to operate in Australia. Currently, digital currencies are taxed twice: once when purchased and again when used in exchange for other goods and services. Under the new law, digital currencies will only be taxed once.
The legislation will have a retrospective start date of 1 July 2017. Public consultation is open until 26 July 2017.