Friday, March 14, 2014

Australian Tax Office (ATO) Provides More Guidelines on BTC Treatment

Do you want to share?

Do you like this story?

The global financial community gained a little more confidence in the way that Bitcoin will be treaed going forward as the Australian Tax Office (ATO) has provided businesses with some more guidelines on how it intends to deal with bitcoin in response to an inquiry by a bitcoin entrepreneur, specifically that income and profits derived from bitcoin transactions are taxable.  This comes as no surprise that governments would treat Bitcoin in this way as at is seen as a hybrid between a commodity and a currency. 

According to the ATO:


“A Bitcoin is a numerical amount that is allocated to a ‘Bitcoin address’. A Bitcoin address is a long string of numbers and letters, each one unique. The process through which Bitcoins are created and enter into circulation is called Bitcoin mining.  Mining involves using freely downloadable Bitcoin software to solve complex cryptographic equations that essentially verify and validate blocks of Bitcoin transactions. The first ‘miner’ to successfully solving an equation receives a specified number of newly created Bitcoins as a reward to their Bitcoin address.  Accordingly, Bitcoins rely on a network of Bitcoin miners using the system to validate transactions and collectively implement a replicated ledger of Bitcoin transactions. The security of this ledger is protected by this mining process.  Bitcoins are circulated using a peer-to-peer computer network. Bitcoin users store their Bitcoins in a software program called a ‘Bitcoin wallet’.  A transaction involving Bitcoins requires an account, which is in essence a ‘public-/private-keypair’. A Bitcoin address derived from the public key is used to identify the account. To transfer Bitcoins to an account a transaction is created with the address of the account as the destination. To send Bitcoins from an account, the transaction has to be signed with the private key associated with the sending account.”

They later say...

“You invested a substantial amount of money in computer hardware and advanced scientific computing systems with the purpose of making substantial profit from mining and selling Bitcoins.”


This clarification continues the trend of Australia being fairly open to responses to Bitcoin treatment.  

Find out about...

Bitcoin (82) Infographic (30) Bitcion (26) Governments (18) 101 (14) Alts (13) Legal (12) Cryptocurrencies (11) Trading (10) Litecoin (9) MtGox (9) Startup (9) Cryptsy (8) Banking (6) China (6) Dogecoin (6) History (6) Investing (5) Mining (5) Value (5) Video (5) CoinBase (4) SIlkroad (4) Taxes (4) BitInstant (3) BitPay (3) Bitcoins (3) CNN (3) Canada (3) Charles Shrem (3) Economics (3) Inforgraphic (3) Mega (3) Miner (3) Money Transfer (3) Secondmarket (3) Taxation (3) Twitter (3) ASIC (2) Analytics (2) Bitstamp (2) Block Chain (2) Crashes (2) Gold (2) Hacking (2) Kim Dot Com (2) Kraples (2) Max Keiser (2) MaxCoin (2) Media (2) MegaCoin (2) Miners (2) Peercoin (2) RonPaulCoin (2) Technical (2) TigerDirect (2) Where (2) Winklevoss (2) bitcoins (2) 2014 (1) 42 (1) AMA (1) ASX (1) ATM (1) Academia (1) Amazon (1) Analyst Report (1) Andreessen Horowitz (1) Android (1) Australia (1) Avalon ASIC (1) BITFINEX (1) BTC-e (1) BTCE (1) BTCEX (1) BTCKing (1) BTX (1) Barter (1) BattleCoin (1) Berenberg (1) Bitcoin Days (1) Bitcoin as Commodity (1) Blockchain (1) Blockchain.info (1) Bloomberg (1) Bobby Lee (1) Books (1) Central Banks (1) CoinTerra (1) Coinye (1) Coinye West (1) Credit Cards (1) Denmarl. Bitcoin (1) Detroit (1) Dollar (1) El-Erian (1) Elliott Management (1) Encryption (1) Europe (1) Exhanges (1) FaceBook (1) Feathercoin (1) FinCen (1) Finland (1) Forex (1) Fred Ehrsam (1) Fun (1) Funding (1) Goldman (1) Greenbank (1) Hashtag (1) Heineken (1) Helsinki (1) Hoarder metrics (1) Igor (1) Investigation (1) JPMorgan (1) Japan (1) Jet (1) Kayne (1) Landscape (1) Las Vegas (1) Li Ka-shing (1) Linux (1) Liquidity (1) Local Bitcoins (1) MAS (1) Mac (1) Markets (1) Masses (1) Matrix (1) Mexico (1) Michigan (1) Millennials (1) Mint (1) MoonCoin (1) Namecoin (1) Neo (1) New York (1) Novacoin (1) OS (1) Online Wallet (1) OpenSourceCoin (1) Options (1) Overstock (1) PBOC (1) PIMCO (1) Pakistan (1) Payment Networks (1) Paypal (1) Pintrest (1) Police (1) Primecoin (1) Princeton (1) Publishing (1) Quark (1) Rap (1) Reddit (1) Ribbit Capital (1) Robbers (1) Robert Faiella (1) Roger Ver (1) Russia (1) Salary (1) Satoshi Nakamoto (1) Sberbank (1) Series B (1) Sigapore (1) Singapore (1) SolarCoin (1) Spanish (1) Staoshi Nakamoto (1) Statistics (1) Subway (1) Sweden (1) Switzerland (1) Tesla (1) The D (1) Transaction (1) TurboTax (1) USB (1) Union Square Ventures (1) VC (1) Velocity (1) VisualCapitalist (1) Volatility (1) Western Union (1) What to Buy WIth Bitcoin? (1) Windows (1) Zanga (1) cagecoin (1) cionye (1) democracy (1) enviornment (1) fiat (1) kanye (1) voting (1)