The Australian Court classifies Bitcoin as money, could trigger $ 640 million in tax reimbursements
- The Australian judge regulates Bitcoin should be treated as money, not as a taxable asset.
- The decision contradicts the position of the ATO of a decade on the taxation of cryptocurrencies.
- According to a tax lawyer, if the decision is confirmed, possible reimbursements could total $ 640 million.
A judge in Australia decided that Bitcoin should be treated as money rather than a taxable asset, which can considerably change the tax environment of the country's cryptocurrency. The decision could lead to capital gains tax yields (CGT) of more than $ 640 million for Bitcoin transactions.
The decision of May 19 resulted from a criminal case involving Federal police officer William Wheatley, accused of having stolen 81.6 Bitcoin in 2019, according to the Australian Financial Review (AFR). When stolen, assets were estimated at around $ 492,000. Today, these same tokens were worth more than $ 13 million at current market prices.
In his decisionVictoria judge Michael O'Connell concluded that Bitcoin is a type of money rather than property. The judge compared digital assets to Australian dollars instead of comparing it to assets such as actions, gold or foreign currencies.
This interpretation could establish a legal precedent which places Bitcoin transactions outside the scope of the current CGT regime of Australia, with large -scale implications for cryptographic investors and the Australian tax system.
Power challenges decinates tax guidance
Tax lawyer Adrian Cartland told AFR that the verdict “completely upsets” the long-standing position of the Australian tax office (ATO) on the taxation of cryptocurrencies.
Cryptocurrency assets have been classified as CGT assets by ATO since 2014, which means that users have to pay taxes when they sell or exchange them. This framework has been the basis of the taxation of cryptocurrency transactions in Australia for more than a decade. The recent decision calls into question this approach by recognizing the monetary nature of Bitcoin rather than treating it as a property, potentially exempting it from the CGT.
Cartland calculates that tax reimbursements for taxpayers who have already paid the CGT on Bitcoin transactions could reach around $ 1 billion ($ 640 million) if the decision is confirmed as a result of possible challenges.
However, the ATO did not check these figures, claiming that there are no official projections of the potential amount of return in the event that the case changes the Australian tax of Bitcoin.
