An Australian court ruling may spark $640 million in bitcoin tax refunds, marking a potential turning point for crypto taxation and investor relief.
The Australian Tax Office’s long-standing position on cryptocurrency taxes may be challenged by a judge’s decision in a criminal case, which might result in $640 million in tax refunds.
A judge in Australia decided that cryptocurrency should be regarded as money rather than a taxable asset, which could result in up to $640 million in capital gains tax (CGT) refunds on Bitcoin transactions.
The ruling was made in a criminal case involving federal police officer William Wheatley, who was accused of stealing 81.6 Bitcoin (BTC $102,515) in 2019, according to a May 19 Australian Financial Review (AFR) story. The assets were valued at approximately $492,000. The tokens are worth over $13 million at current market pricing.
According to Judge Michael O’Connell of Victoria, who compared the digital asset to Australian dollars rather than shares, gold, or foreign currencies, Bitcoin is a type of money rather than property.
The interpretation might establish a precedent exempting Bitcoin transactions from Australia’s CGT laws.
A recent court decision is challenging Australian crypto tax regulations.
Adrian Cartland, a tax attorney, stated in an AFR interview that the decision “totally upends” the current stance of the Australian Taxation Office (ATO).
Crypto assets have been categorized as CGT assets by the ATO since 2014. This implies that consumers must pay tax when they sell or trade them. Any disposal of Bitcoin, including selling it for cash, trading it in for another cryptocurrency, or using it to pay for goods or services, is considered a CGT event, according to the ATO’s guidelines.
Australia has taxed bitcoin transactions using this structure for more than ten years. The new decision, however, casts doubt on the strategy by arguing that Bitcoin operates more like money than property. As a result, it may be exempt from CGT.
Bitcoin tax refunds total $640 million.
According to Cartland, it was decided that Bitcoin was Australian currency. It is not a CGT asset, in other words. As a result, buying and selling Bitcoin has no tax repercussions,” the tax attorney continued.
Cartland thinks a tax refund of $1 billion ($640 million) could be available if the appeal’s decision is upheld.
Cartland believes that reimbursements might reach $1 billion. Still, the ATO stated that no official data were available to confirm the amount that could be reimbursed if the case affects Australia’s taxation of Bitcoin.
