CoinJar relocates offshore to avoid GST burden

CEO of the Bitcoin exchange says the ATOs 'double tax' ruling contributed to the decision to move its headquarters to the UK

Melbourne-based Bitcoin exchange CoinJar is moving its headquarters to London in the UK where it says it can do business in a less burdensome regulatory environment.

In August, the Australian Taxation Office released a draft ruling that meant businesses will be charged the 10 per cent Goods and Services Tax (GST) when a customer buys a product or service using bitcoins, and then charged another 10 per cent when they change the bitcoins into Australian dollars at a Bitcoin exchange.

Bitcoin advocates have said the ATO's treatment of the currency will encourage businesses to move offshore and take jobs with them. In response to the ATO's ruling, Craig Wright, president of the Centre for Strategic Cyberspace and Security Science, said the double dipping of tax would put the Australian Bitcoin industry at a disadvantage.

The chairperson of Australian Digital Currency Commerce Association, Ronald Tucker, told the ongoing Senate inquiry into digital currency that the ATO ruling has already resulted in some Australian Bitcoin-based businesses shutting down.

In the UK, however, Bitcoin and other crypto-currencies are exempt from the equivalent of GST the Value Added Tax (VAT).

Although the ATOs ruling was not the only reason CoinJar decided to move offshore, it contributed to the decision, said CEO Asher Tan.

The CEO said he was pleased that the tax treatment of Bitcoin and other crypto-currencies had drawn interest from parliamentarians.

We have put in a submission [to the Senate inquiry on digital currency] last week and we are actually quite optimistic about the discourse between government, entrepreneurs and technologists and how we should treat new technology, he said.

With its new headquarters based in the UKs financial technology hub Level 39 at Canary Wharf, London CoinJar hopes to reach a larger market, said Tan.

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CoinJar relocates offshore to avoid GST burden