July 2014 – learntit test

If you’ve been paying attention to bitcoin news over the last few weeks, you would have heard about the release of the draft New York ‘bitLicense’ regulations. These proposed regulations have been met with a great deal of animosity from some portions of the bitcoin community, with many feeling that they are too onerous for nascent bitcoin start-ups.

Before going any further, it’s important to note that these are only in draft form. Specifically, they have been released for comment and feedback. In this regard, the final form of these regulations may be radically different to the ones currently presented in the “regulatory framework” – one way or the other. Having said this, the smart money is on these provisions being very similar to the final ones issued by the New York Department of Financial Services (NYDFS).

What’s The Big Deal?

By way of background, for those unfamiliar with the proposed ‘bitlicense’ regime, back in November last year the NYDFS signalled that they’d consider issuing ‘bitlicenses’ to those looking to operate certain types of virtual currency businesses in New York (See HERE for the press release). In January of this year, they held hearings on virtual currencies with many well known names from the industry asked to provide their views. During the hearings a number of heavy weights in the tech industry called for clarity on bitcoin regulation. After the hearings, the NYDFS noted that they’d take these comments onboard in coming up with any further guidelines around the licensing of virtual currency businesses. Then on 17 July 2014 they issued the proposed bitlicense framework for comment (See HERE for the press release and HERE for the framework).

Continue reading “Bitlicense Provides A Reality Check For Start-ups”

This article does not constitute legal, accounting or tax advice. Any tax-related opinions in any part of this article are not tax advice, and were not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties or for promoting, marketing, or recommending to another party any transaction or matter addressed herein. Everyone should seek the advice of a competent, independent tax professional regarding their particular circumstances.

I make no claims, promises, or warranties about the accuracy of the information provided in this article. Tax advice cannot be provided on a general basis, and must be specifically tailored for each individual by their particular representative. Everything included in this article is the author’s opinion and not a concrete fact.

Yesterday, it was reported that the Australian Taxation Office (ATO) would be delaying its long awaited position paper on bitcoin until after they’d received advice from the Solicitor-General, Justin Gleeson SC.

Understandably, many in the bitcoin community feel that the ATO has been dragging its feet on providing guidance. Further, given that the process of receiving advice from the Solicitor-General can take months, many may end up being caught in limbo come income tax return lodgement time. Which could be a much bigger issue.

Does An ATO View Exist?

There have been murmurings that the ATO has in fact granted private binding rulings to a few taxpayers in relation to the tax treatment of bitcoin. In fact, CoinDesk reported in March that an ‘Australian bitcoin entrepreneur’ had received a ruling from the ATO regarding the taxation treatment of bitcoin. According to the article, the ruling suggested that bitcoin would (i) be subject to Goods and Services Tax (GST) and (ii) would be taxable on revenue or capital account depending on the activities related to the disposal and acquisition of the bitcoins. In other words, bitcoin would sit squarely in the middle of the Australian tax net (see HERE for the article).

However, this ruling hasn’t been made public via the ATO’s Private Binding Rulings Register (or it may have been removed), which does cast some doubt as to whether it has been finalised. In fact, up until recently there were no rulings which had been published by the ATO on the topic of bitcoin.

However, this changed a few days ago.

Continue reading “ATO Delays Position On Bitcoin – But Does Offer Some Guidance Via Private Binding Ruling”