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

A recent Australian court ruling could lead to up to $640 million in capital gains tax (CGT) refunds on Bitcoin transactions.

The ruling came from a criminal case involving a federal police officer accused of stealing Bitcoin. Judge Michael O’Connell of Victoria decided that Bitcoin should be classified as money rather than property, likening it to Australian dollars instead of shares or gold.

This interpretation challenges the Australian Taxation Office's (ATO) long-standing position since 2014, which treats cryptocurrencies as CGT assets subject to tax upon disposal, including buying/ selling, or using Bitcoin for purchases.

Tax lawyer Adrian Cartland explained that if Bitcoin is legally recognized as money, acquisitions and disposals would have no CGT consequences. If this ruling is upheld on appeal, it could set a precedent exempting Bitcoin transactions from CGT, potentially resulting in tax refunds totaling around 1 billion Australian dollars (approximately $640 million USD). However, the ATO has not confirmed any official figures regarding potential refunds.

This court decision could fundamentally change how Bitcoin is taxed in Australia, shifting it from a taxable asset to a form of currency, which may lead to substantial tax refunds for Bitcoin holders.

It's me, @justmythoughts, an ordinary Hive user looking to make the most of the platform. I will appreciate your support. Follow me for more. Thanks, Gracias :)