A court decision in Australia could open the door to $ 640 million in capital gains tax reimbursement (CGT) on Bitcoin transactions after a judge ruled that crypto should be treated as money rather than a taxable asset.
On May 19, the Australian Financial Review (AFR) said that the decision had occurred in a criminal case involving federal police officers William Wheatley, who stole 81.6 Bitcoin (BTC) in 2019. At the time, the assets were worth around $ 492,000. At current market prices, tokens are estimated at more than $ 13 million.
In the case, judge Michael O’Connell of Victoria judged that Bitcoin is considered to be a form of money rather than property, comparing digital assets to Australian dollars rather than actions, gold or foreign currencies.
The interpretation could establish a legal precedent, potentially placing Bitcoin transactions outside the scope of the current CGT regime of Australia.
New Decision of the Court Contestes
In an AFR interview, tax lawyer Adrian Cartland said that the verdict “completely upset” the current post of the Australian Tax Bureau (ATO).
Since 2014, the ATO has classified cryptographic assets as CGT assets. This means that users have to pay taxes when selling or exchanges. According to the ato directives, any elimination of Bitcoin, including selling it for Fiat, exchanging it for another crypto or using them to buy goods or services, constitutes a CGT event.
This framework has been the basis of cryptocurrency transactions in Australia for more than a decade. However, the recent decision questions the approach by suggesting that Bitcoin works more as money than property. This potentially exempts it from CGT.
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Tax reimbursements could reach $ 640 million
Cartland said it was judged that Bitcoin was Australian money. “That is to say, this is not a CGT asset. Therefore, the acquisitions and eliminations of Bitcoin have no tax consequences,” added the tax lawyer.
If the decision is confirmed on the appeal, Cartland estimates that there may be potential tax reimbursements totaling 1 billion Australian dollars ($ 640 million).
However, while Cartland thinks that there could be up to a billion reimbursements, the ATO said that there were no official figures that confirmed the amount to potentially repay if the case changes the way Bitcoin is taxed in Australia.
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