Australian court ruling could lead to $640M in Bitcoin tax refunds

2 weeks ago

A judge’s ruling successful a transgression lawsuit whitethorn pave the mode for $640 cardinal successful taxation refunds, challenging the Australian Tax Office’s long-held stance connected crypto taxation.

Australian tribunal ruling could pb to $640M successful Bitcoin taxation refunds

A tribunal determination successful Australia could unfastened the doorway to arsenic overmuch arsenic $640 cardinal successful superior gains taxation (CGT) refunds connected Bitcoin transactions aft a justice ruled that crypto should beryllium treated arsenic wealth alternatively than a taxable asset.

On May 19, the Australian Financial Review (AFR) reported that the determination arose wrong a transgression lawsuit involving national constabulary serviceman William Wheatley, who allegedly stole 81.6 Bitcoin (BTC) successful 2019. At the time, the assets were worthy astir $492,000. At existent marketplace prices, the tokens are valued astatine much than $13 million.

In the case, Judge Michael O’Connell of Victoria ruled that Bitcoin qualifies arsenic a signifier of wealth alternatively than property, likening the integer plus to Australian dollars alternatively than to shares, golden oregon overseas currency.

The mentation could acceptable a ineligible precedent, perchance placing Bitcoin transactions extracurricular the scope of Australia’s existent CGT regime.

New tribunal ruling challenges Australian crypto taxation laws

In an AFR interview, taxation lawyer Adrian Cartland said the verdict “totally upends” the Australian Taxation Office’s (ATO) existent position.

Since 2014, the ATO has classified crypto assets arsenic CGT assets. This means that users indispensable wage taxation erstwhile selling oregon trading them. Under the ATO’s guidance, immoderate disposal of Bitcoin, including selling it for fiat, exchanging it for different crypto oregon utilizing it to acquisition goods oregon services, constitutes a CGT event.

This model has been the ground for taxing cryptocurrency transactions successful Australia for implicit a decade. However, the caller ruling challenges the attack by suggesting that Bitcoin functions much similar wealth than property. This perchance exempts it from CGT.

Tax refunds could scope $640 million

Cartland said it was held that Bitcoin is Australian money. “That is, it is not a CGT asset. Therefore, acquisitions and disposals of Bitcoin person nary taxation consequences,” the taxation lawyer added.

If the ruling is upheld connected the appeal, Cartland estimates that determination could beryllium imaginable taxation refunds totalling 1 cardinal Australian dollars ($640 million).

However, portion Cartland thinks determination could beryllium up to a cardinal successful refunds, the ATO said determination were nary authoritative figures that corroborate the magnitude to beryllium perchance refunded if the lawsuit changes however Bitcoin is taxed successful Australia.