GST and Bitcoin - potential pitfalls
Australian GST registered businesses looking at accepting Bitcoin payments should be cautious about a possible double GST liability according to Matthew Cridland, GST Partner at DLA Piper.
While monetary payments and foreign exchange transactions are generally exempt from GST, the issue with Bitcoins is that they may not qualify as "money" or "currency of a foreign country" for GST exemption purposes. As a virtual currency, Bitcoins are not the currency of any country.
This article examines the GST implications of Bitcoin currency and details what our clients should keep in mind if considering accepting Bitcoin payments.