Australian Tax Office Makes Ruling on the treatment of Bitcoin and other Crypto Currencies

The Australian Tax Office has now completed its review regarding the treatment of Bitcoin and other cyrpto currencies. Information can be found here. As this page changes somewhat frequently we have preserved the relevant content below (copied 22-July-2014) for retention’s sake:

Status Consultation completed
Purpose To seek input from a business community perspective about the impacts of differing taxation treatments of Bitcoin and other crypto currencies on the Australian business community.
Description Industry representatives from professional and Bitcoin associations, and leading businesses involved in the emerging Bitcoin community, met on 29 April 2014. Attendees provided valuable information about their business models and how different tax treatments would impact their clients, members and businesses.
Who we consulted Industry representatives from profession and Bitcoin associations.
Outcomes The group provided valuable feedback on ATO propositions that have been part of our deliberations for an Australian position on this tax treatment. We have sought further advice from external legal counsel, which has delayed the release of the guidance paper. It remains our priority to provide the community with the final guidance paper in time for people to complete their 2013–14 income tax returns. The key information that a taxpayer will need about each transaction or event with Bitcoin is the date, the amount in $A, what it was for, and who the other party was (their Bitcoin address, at a minimum).
Contact Michael HardySenior Assistant

Detailed guidance is not yet available leaving it unclear if consumers using crypto currencies will need to record and report each individual transaction to the Australian tax office, or, instead only report transactions that are made to purchase tax-deductible items (as is currently the case with fiat transactions). We have e-mailed Michael Hardy seeking further clarification and will post more detailed information as it comes to light.

Update 25-July-2014:

I’ve heard back from an assistant of Michael Hardy but unfortunately the response is very non-committal and has very little more to offer:

Subject: RE: Bitcoin and the recording of transactions [SEC=UNCLASSIFIED]
Date: Fri, 25 Jul 2014 02:08:08 +0000

Hello Michael

The ATO will have a guidance paper issued in time for people to complete their 2013-14 income tax returns.

When this occurs, you will be able to find the paper on the ATO website

We recommend that you keep detailed records of the date and amount of the transaction, as well as the payee and the reason for the transaction.