Bitcoin (BTC) Is More Like Australian Dollars Than Gold or Shares, Victorian Magistrate Rules

Crypto News Australia recently reported how a Victorian magistrate ruled that Bitcoin (BTC) is more like Australian dollars than gold or shares.

A recent ruling by a Victorian magistrate has sparked debate and potential implications for cryptocurrency taxation in Australia.

The ruling, covered by Crypto News Australia, focused on a case where an accountant claimed he didn’t need to pay capital gains tax (CGT) on Bitcoin (BTC) sold in 2021. The magistrate sided with the accountant, stating that BTC was more like Australian dollars than gold or shares, which are usually subject to CGT.

This directly contradicts the Australian Tax Office’s (ATO) stance. Since 2014, the ATO has maintained that Bitcoin is a CGT asset in Australia.

The judge’s ruling, if upheld by higher courts, could see thousands of Australians eligible for up to AU$1B in tax refunds and potentially change how other crypto is taxed in Australia.

However, don’t expect tax refunds anytime soon. Despite the judge’s ruling, the ATO has yet to alter its position. They’ve been treating Bitcoin as taxable since 2014 and are unlikely to reverse course overnight and begin refunding everyone.

Dr Lizzie Morton, a lecturer in law at the University of Sydney, advises taxpayers not to expect a refund based on the judgment alone and to consult registered tax professionals for advice.

In essence, Morton suggests that taxpayers should continue reporting their taxes as usual until the ATO updates its guidance or a higher court confirms the new interpretation.

The current ruling isn’t final; it’s expected to be reviewed by the Court of Appeal, and possibly even the Federal or High Court later this year, according to Geoff Rooney, a partner in BDO’s Financial Services Audit & Assurance in Sydney.

If upheld, it could be a game-changer. Byron Goldberg, venture capitalist at Backbone Partners, says O’Connell’s findings could position Australia as a leader in crypto with no more capital gains tax on BTC, leading to more investors, developers, and businesses coming to the country.