Tax treatment
The ATO
holds the view that bitcoins are neither money nor foreign
currency, and the supply of bitcoins will not attract GST. However,
bitcoins are an asset for CGT purposes. In effect, paying for goods
and services by bitcoin will be regarded by the ATO as a barter
transaction. This treatment is broadly similar to the treatment
overseas, with the
UK and US both
treating bitcoins as property for taxation purposes.
International developments
As noted above, many countries have determined that bitcoins are
to be treated as property, not currency, for the purposes of
taxation laws. But there are some significant differences in how
the product is regulated around the globe. China has prohibited
financial institutions and payment companies from handling bitcoin,
but individuals are able to hold and trade them. The EU does not
have a unified position but Germany has recognised a bitcoin as a
'unit of account' (which means that it is a
