On 22 June 2022, the Government announced it would introduce legislation to exclude crypto assets such as Bitcoin from being treated as a foreign currency for Australian income tax purposes. The proposed legislation maintains the current tax treatment of crypto assets and removes uncertainty following the decision of the Government of El Salvador to adopt Bitcoin as a legal tender.
Exposure draft legislation, Treasury Laws Amendment (Measures for Consultation) Bill 2022: Taxation treatment of digital currency, and associated draft explanatory material, have been released for public consultation. Interested parties are invited to provide comments.
The draft legislation relies on amending the existing definition of digital currency in the GST Act (A New Tax System (Goods and Services Tax) Act 1999) before adopting it as an exclusion from the definition of foreign currency in the Income Tax Assessment Act 1997.