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In a move that would align Australia with the UK, Spain, Canada and Singapore, an Australian senate committee recommends that digital currencies be treated as money as opposed to a commodity.
An Australian government inquiry will recommend treating digital currencies as money, simplifying tax for people who trade with them while forcing bitcoin exchanges to monitor customers for potential money laundering and terrorism financing activities.
The change would help to eliminate the "double taxation effect".
Treating bitcoin as a tradable commodity, rather than a currency, "creates a double taxation effect that has placed an additional burden on Australian digital currency businesses," the Senate report says, noting that Australians pay sales tax when they buy digital currency and again when they buy something with the digital currency.
Read the quoted story on Reuters http://reut.rs/1MMbUay
Read additional coverage on Computerworld Australia http://www.computerworld.com.au/article/581141/inquiry-recommends-radical-shakeup-australian-bitcoin-laws/
Read the senate report at http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Digital_currency/Report
(Score: 3, Informative) by juggs on Friday August 07 2015, @06:35AM
Bartering is subject to VAT (Value Added Tax) in the UK
ref: https://www.gov.uk/vat-part-exchanges-barters-and-set-offs [www.gov.uk]
As I understand it, even if no cash changes hands VAT is due on what that good or service would have cost at typical rates outside of barter.
Seems like a long closed loophole.