The Australian Taxation Office (ATO) is assembling a special task force to research how to best track and tax cryptocurrency, according to a report late Wednesday.
"We are consulting with key stakeholders who have expressed an interest in tax issues relating to cryptocurrencies," an ATO spokesperson told the Australian Financial Review. "We will discuss common queries and scenarios, as well as practical issues and the tax implications for current and anticipated future developments in relation to cryptocurrencies."
Canberra representative are speaking with representatives of banks, state revenue offices, and Austrac (Australian Transaction Reports and Analysis Centre). The issues that the government faces includes ensuring liability of Austrian citizens who trade anonymously, as well as creating a clear tax structure for the wildly fluctuating values of bitcoin and other cryptocurrencies.
Australian tax experts also are unlikely to treat cryptocurrencies as currencies. Instead, cryptocurrencies are treated as financial assets, akin to stocks and bonds. Prior to July 1, 2017, cryptocurrencies were subject to GST, Australia's goods and services tax.
The report suggests banks are cooperating with authorities after scandals last year about lax standards and money laundering. In December, rumors circulated Australian banks were freezing accounts to four major bitcoin exchanges: CoinJar, CoinBase, Coinspot, and BTC Markets. This forced exchanges like Coinspot to suspend trading. No banks have confirmed the speculation over the freezes.
The disputes come during a time of high interest in cryptocurrencies, with bitcoin's gains helping to drive up interest in lesser-known altcoins. This has, in turn, invited sharp criticism from major players in the Australian economy. In mid-December, Reserve Bank of Australia Governor, Dr. Philip Lowe, proclaimed that crypto's surge “feels more like a speculative mania than it has to do with their use as an efficient and convenient form of electronic payment.”
Australia is not the only country grappling with questions over tax responsibility. Sweden recently requested a ruling on VAT from the Court of Justice of the European Union. The IRS asks employers who pay in crypto to track the USD conversion rate on each date of payment, according to TurboTax. This is as opposed to providing a flat exchange rate for the entire year, which the IRS updates every January. Additionally, US miners must report income and investors must list cryptocurrency as an asset.