Tax treatment of Crypto-currencies in – specifically bitcoin

This guidance paper provides an overview of the tax treatment for transactions associated with crypto currencies, specifically bitcoin.

Note: From 1 July 2017, sales and purchases of digital currency such as bitcoin are no longer subject to GST. The GST guidance in this document is currently under review as a result of recent changes to the GST law.

Transacting with bitcoin is akin to a barter arrangement, with similar tax consequences. Our view is that bitcoin is neither money nor a foreign currency, and the supply of bitcoin is not a financial supply for goods and services tax (GST) purposes. Bitcoin is, however, an asset for capital gains tax (CGT) purposes.