The Australian government’s online business information portal has published a ‘Bitcoin for business’ page to advise operators of their tax and other regulatory obligations.
As well as a basic explanation of what bitcoin is and how it works, the business.gov.au page also features sections on accepting bitcoins, tax implications, risks, and paying employee salaries with digital currency.
With headings like “What are digital currencies and crypto-currencies?”, “How do I accept Bitcoin in my business?” and “Should I accept Bitcoin payments?” and links to more detailed information, the page is intended for newcomers as well as seasoned digital currency users.
In its closing section headed “Have your say on the future of digital currencies in Australia”, the portal invites business owners to “shape the future of digital currencies in Australia” by leaving feedback.
Unfortunately, there are no guidelines for managing banking relationships or the know-your-customer (KYC) or anti-money laundering/counter-terrorism-financing (AML/CTF) regulations – which banks will expect bitcoin businesses to understand, and which often raise their risk profiles above some banks’ tolerance levels.
Draft tax guidelines
It follows the recent release of formal draft tax guidelines on bitcoin-related business obligations from the country’s revenue collection agency, the Australian Tax Office, which received a somewhat mixed response from the local bitcoin community.
For future tax purposes, Australians transacting in bitcoin will need to keep records on the date of the transaction and party being transacted with (a bitcoin address is adequate), the Australian dollar (AUD) value of the transaction according to reputable exchanges at the time, and a note of what the transaction was for.
Of particular interest was the non-definition of bitcoin as a form of money or ‘financial supply’ which raised concerns that bitcoins could be double-taxed under Australia’s Goods and Services Tax (GST), or that including the 10% sales tax on Australian-sold bitcoins would drive business away from local exchanges to those hosted overseas.
Employers paying salaries in bitcoin are still obligated to deduct pay-as-you-go income tax and superannuation (retirement fund) amounts in AUD.