Taxation Determination TD 2014/28
Date of effect: 1 July 2014

What this ruling is about: This publication (excluding appendixes) is a public ruling for the purposes of the Taxation Administration Act 1953. A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you. Ruling 1. Yes. The provision of bitcoin by an employer to an employee in respect of their employment is a property fringe benefit for the purposes of subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA). [1] Date of effect 2. This Determination applies to years of income commencing both before and after its date of issue. However, this Determination will not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of this Determination (see paragraphs 75 and 76 of Taxation Ruling TR 2006/10). 3. While the ATO view set out in this Determination will have application for periods prior to its publication, the ATO will not generally seek to apply compliance resources to applying this view in income years commencing before 1 July 2014 in relation to taxpayers who can show that they have made a genuine attempt to determine the tax treatment of bitcoin, and have then adopted a consistent position regarding the tax treatment of bitcoin in those years. Commissioner of Taxation 17 December 2014




Appendix: What is bitcoin?: 4. This Determination is part of a suite of Rulings [2] issued by the Commissioner on Bitcoin. A detailed description of Bitcoin is contained in TD 2014/25. 5. In accordance with TD 2014/25 and TD 2014/26 Bitcoin is not money [3] but is considered property for tax purposes. Bitcoin is also not a chose in action. [4] | Is the provision of bitcoin a property benefit?: 6. 'Property benefit', as defined in subsection 136(1), 'means a benefit referred to in section 40, but does not include a benefit that is a benefit by virtue of a provision of Subdivision A of Divisions 2 to 10 (inclusive of Part III)'. Bitcoin is not a benefit described in Divisions 2 to 10. 7. Section 40 provides that where a person (the 'provider') provides [5] property to another person (the 'recipient'), the provision of the property 'shall be taken to constitute a benefit provided by the provider to the recipient'. 8. Property as defined in subsection 136(1) means 'intangible property' and 'tangible property'. 'Tangible property' is, in turn, defined as 'goods and includes animals, including fish; and gas and electricity'. 'Intangible property' is defined as: 9. Bitcoin is not tangible property for the purposes of the FBTAA. Nor is bitcoin real property and bitcoin holding rights are not a chose in action. However as the definition of intangible property also includes 'any other kind of property other than tangible property', bitcoin will fall within this definition. The provision of bitcoin by an employer to an employee is therefore a property benefit. | Is bitcoin a property fringe benefit?: 10. 'Property fringe benefit' is defined in subsection 136(1) and means 'a fringe benefit that is a property benefit'. 11. The term 'fringe benefit' is relevantly defined in subsection 136(1) to mean: 12. Accordingly, a benefit will not be a fringe benefit if it is 'salary or wages'. 'Salary or wages' is relevantly defined in subsection 136(1) to mean: 13. Item 1 of the table to this definition lists section 12-35 of Schedule 1 to the Tax Administration Act 1953 (TAA) as the relevant provision in relation to a payment to an employee. 14. Section 12-35 of Schedule 1 to the TAA, however, will not apply to require withholding on 'a payment in so far as it consists of providing a non-cash benefit' in accordance with section 12-10 of Schedule 1 to the TAA. 15. Section 995-1 of the Income Taxation Assessment Act 1997 defines the term 'non-cash benefit' as 'property or services in any form except money'. 16. As bitcoin is not money but is considered to be property for tax purposes, bitcoin satisfies the definition of a 'non-cash benefit' and it is excluded from Pay As You Go (PAYG) withholding. This exclusion from PAYG withholding means that bitcoin is not 'salary or wages' within the definition of that term in subsection 136(1) and accordingly is not 'salary or wages' for the purposes of the exclusion in the definition of 'fringe benefit' in the same subsection. 17. Accordingly, the provision of bitcoin by an employer to an employee in respect of the employee's employment will be a property fringe benefit for the purposes of subsection 136(1). [6] 18. The employer of the employee in these circumstances is liable to pay FBT on the taxable value of the property fringe benefits. Income derived by a taxpayer by way of the provision of a fringe benefit is not assessable and is not exempt income of the taxpayer under subsection 23L(1) of the Income Tax Assessment Act 1936. Previously issued as TD 2014/D14


...a benefit provided to the employee ... by the employer ... in respect of the employment of the employee, but does not include a payment of salary or wages ...


Related rulings: TR 2006/10 TD 2014/25 TD 2014/26 TD 2014/27 GSTR 2014/3
Legislative references: FBTAA 1986 FBTAA 1986 Pt III Div 2 FBTAA 1986 Pt III Div 2 Subdiv A FBTAA 1986 Pt III Div 3 FBTAA 1986 Pt III Div 3 Subdiv A FBTAA 1986 Pt III Div 4 FBTAA 1986 Pt III Div 4 Subdiv A FBTAA 1986 Pt III Div 5 FBTAA 1986 Pt III Div 5 Subdiv A FBTAA 1986 Pt III Div 6 FBTAA 1986 Pt III Div 6 Subdiv A FBTAA 1986 Pt III Div 7 FBTAA 1986 Pt III Div 7 Subdiv A FBTAA 1986 Pt III Div 8 FBTAA 1986 Pt III Div 8 Subdiv A FBTAA 1986 Pt III Div 9 FBTAA 1986 Pt III Div 9 Subdiv A FBTAA 1986 Pt III Div 9A FBTAA 1986 Pt III Div 9A Subdiv A FBTAA 1986 Pt III Div 10 FBTAA 1986 Pt III Div 10 Subdiv A FBTAA 1986 40 FBTAA 1986 136(1) ITAA 1936 23L(1) ITAA 1997 995-1 TAA 1953 TAA 1953 Sch 1 12-10 TAA 1953 Sch 1 12-35
Subject references: benefit FBT FBT intangible property FBT property fringe benefit FBT salary or wages FBT tangible property fringe benefits tax