Source: Cointelegraph
Original: “Australian court ruling could lead to $640 million Bitcoin (BTC) tax refunds”
An Australian court ruling could open the door for up to $640 million in capital gains tax (CGT) refunds for Bitcoin (BTC) transactions, after a judge determined that cryptocurrencies should be considered currency rather than taxable assets.
On May 19, the Australian Financial Review (AFR) reported that the ruling stemmed from a criminal case involving federal officer William Wheatley, who was accused of stealing 81.6 Bitcoins (BTC) in 2019. At that time, these assets were valued at approximately $492,000. At current market prices, these tokens are worth over $13 million.
In the case, Victoria state judge Michael O'Connell ruled that Bitcoin qualifies as currency rather than property, likening the digital asset to the Australian dollar rather than stocks, gold, or foreign currency.
This interpretation could set a legal precedent, potentially placing Bitcoin transactions outside the scope of Australia’s current CGT regime.
In an interview with AFR, tax lawyer Adrian Cartland stated that this ruling "completely overturns" the Australian Taxation Office's (ATO) current position.
Since 2014, the ATO has classified crypto assets as CGT assets. This means that users must pay tax when they sell or trade them. According to ATO guidelines, any disposal of Bitcoin, including selling it for fiat currency, exchanging it for other cryptocurrencies, or using it to purchase goods or services, constitutes a CGT event.
This framework has been the basis for taxing cryptocurrency transactions in Australia for over a decade. However, the recent ruling challenges this approach by suggesting that Bitcoin is more like currency than property. This could exempt it from CGT.
Cartland stated that the court recognized Bitcoin as Australian currency. "That is to say, it is not a CGT asset. Therefore, the purchase and disposal of Bitcoin have no tax consequences," the tax lawyer added.
If this ruling is upheld on appeal, Cartland estimates that there could be a potential tax refund totaling AUD 1 billion ($640 million).
However, despite Cartland's belief that refunds could reach up to AUD 1 billion, the ATO stated that there is no official data confirming the potential refund amount if the case changes the way Bitcoin is taxed in Australia.
Related: US cryptocurrency fund inflows surpass $7.5 billion in 2025, investor enthusiasm surges
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