Australia: Minister of Finance announces cryptocurrencies not taxed as foreign currency

On 22 June 2022, the Australian Treasurer announced that cryptocurrencies are not be considered foreign currency for tax purposes. Given the decision in El Salvador and the Central African Republic to permit bitcoin as a legal tender, according to the Australian Minister of Finance, this could create uncertainty in the country about the status of cryptocurrencies such as bitcoin for tax purposes. Therefore, the government announced that it will clarify the legislation to ensure that crypto assets are not considered foreign currency for tax purposes. However, crypto-assets held as investments will continue to be subject to capital gains tax. Particularly, the government claimed that a legislative reform backdated to 1 July 2021 shall come into force to further clarify these issues.