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- Australia government released a budget on tuesday confirming that digital currency will continue to be taxed as an asset class rather than a foreign currency
- EI Salvador made a different move and adopted bitcoin as a legal tender last year
- After the release of budget by australian government cryptocurrency industry seem disappointed by the decision for treating digital currencies as assets for tax purpose not as foreign currency
In june 2022 the Australian government announced that it intend to introduce a law to stop crypto currency from being treated as foreign currency for Australian income tax purpose.And now according to the budget which has been released on tuesday confirming that digital currency will continue to be taxed as an asset class rather than a foreign currency.
And after this if the investors have made any profit from the sell of crypto asset through an exchange or when they trade digital asset for each other they will have to pay capital gain tax. And conventionally capital gain tax discount will also be apply. The budget paper also stated making it very clear that any government issued digital-currency or central bank digital currency both will be continue to be taxed as a foreign currency.
Recently the news was all around when EI Salvador a country in south america made a different move and adopted bitcoin as a legal tender as well as it is the first country to so.The Australian said in its budget announcement that “The legislation removes uncertainty following the decision by EI Salvador to adopt Bitcoin as legal tender in september last year”
After the budget was released by the australian government the cryptocurrency industry seem disappointed by the decision of Australian government for treating digital currencies as assets for tax purpose and not as a foreign currency.
Mitchell Travers, a former cryptocurrency exchange operator and founder of blockchain consultant Soulbis said that
“It would be ill advised for the government to really take an enforcement approach to the taxation of crypto asset in its early stages, especially considering the fact that the Treasury is also investing in trying to migrate the traditional technology system that back our financial system over towards digital assets”
He also added saying that the budget change was unclear and appeared at odds with government testing into the viability of a CBDC.
After adapting Bitcoin as a legal tender last year the country now seem facing heavy economic losses from the huge drop in the crypto prices.
CEO of BTC market, an australian based cryptocurrency exchange said “ I think they are taking a snapshot in time and making an assessment for a long time around what happened in EI Salvador and the price of the bitcoin” he also added that Australia will be left behind by other countries that are taking a more open minded approach.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
