Eternity Law International News Legal regulation of operations with cryptocurrencies in Australia

Legal regulation of operations with cryptocurrencies in Australia

Published:
June 18, 2018

What is the legal regulation of cryptocurrency transactions in Australia? In fact, Australia is a developed state that could create conditions for the development of financial companies and technology centers.

The state for a short period of time became the owner of the most progressive approaches in the financial industry.

The Australian government is implementing the use of Blockchain technology in all spheres of public administration: mail, ground transportation, etc.

State programs promote the development of commercial projects and programs that focus on working with digital money and the latest decentralized technologies.

Digital money in Australia is not considered a financial product, therefore do not need licensing. The legislator adopted the Code of Conduct for players in the digital currency industry, which was developed by the Association of Digital Currencies and Commerce of Australia.

The Code regulates the relationship of participants in the cryptocurrency business in the country, but its implementation is mandatory only for participants of the above-mentioned Association.

Recently, the state is actively combating the laundering of illicit proceeds. Countering the financing of terrorism is the main direction of political development.

It should be noted that operations with the cryptocurrency are taxed on general grounds. When the transaction is completed, you must pay income tax and income tax.

A feature of the Australian tax system is the double taxation on operations with digital currency. The tax is levied both for the exchange of fiat funds and for the purchase of goods received by cryptocurrency.

HISTORY OF LEGAL REGULATION

  1. In 2013, Bitcoin is recognized by the Reserve Bank as an alternative to foreign currency and the current payment system.
  2. In 2014, the regulator began to consider the possibility of levying taxes on foreign exchange operations, but the legal mechanism was never developed. The Securities and Investments Commission after the conducted checks comes to the conclusion that the digital currency can not be equated to a financial product.
  3. In 2015, the Australian Treasury published a financial report that demonstrated the imperfection of the current tax system. When assembling and processing the data, the state treasury service could not take into account digital funds.
  4. At the end of 2016, the question arose about the development of new standards for the recording of digital cash and intangible assets. At the moment, there are active consultations on the development of project documentation, which allows to amend the current legislation. The preliminary completion of the process is projected for 2018.

LEGAL REGULATION OF CRYPTOCURRENCY OPERATIONS

The main legislative act regulating operations with the cryptocurrency in the territory of Australia is the Code of Conduct for players in the digital currency industry, which became effective from December 2016.

In accordance with the requirements of the Code, all members of the Association of Electronic Currencies and Commerce of Australia are obliged:

  • to comply with legal requirements in the field of money laundering;
  • to check the data of directors, leading managers of joint-stock companies;
  • follow the generally accepted “Know Your Customer” policy;
  • to compensate the customer money for services and goods of inadequate quality.

If the violations of the requirements of the Code are revealed, the Association is authorized to impose fines.

TAXATION OF CRYPTOCURRENCY

In 2014, cryptocurrency entrepreneurs received a report from the Australian Tax Service, which indicated that income and profits received from dealing with digital currencies should be paid income tax.

In this case, a significant problem of double taxation arose. The participant of the transaction for the first time pays the tax for the exchange of fiat money for digital, and the second – for the purchase of goods / services. If the amount of the cryptocurrency is more than ten thousand Australian dollars, then the user is exempt from double tax payment.

The government intends in the near future to abolish double taxation of operations with the cryptocurrency. In the near future, digital money will completely replace the fiat. Already today, with mutual consent, the employer can pay wages in the crypto currency. The legislation of Australia does not stand still, adjusting the regulatory framework to the parameters of the modern world.

To correctly implement the procedure for the settlement of cryptocurrency transactions in Australia, contact Eternity Law International. Our company will provide the best conditions for the legalization of the procedure, simply call us.

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