A court decision in Australia might lead to up to $640 million in capital gains tax refunds on Bitcoin transactions after a judge ruled that cryptocurrency should be treated as money, not as a taxable asset.
The Australian Financial Review reported on May. 19 that the decision follows a criminal case involving federal police officer William Wheatley, accused of stealing 81.6 Bitcoin in 2019.
At the time, the assets were worth around $492,000. Those tokens are now worth more than $13 million at today’s market prices.
Judge Michael O’Connell of Victoria ruled that Bitcoin counts as money, not property, comparing it to Australian dollars rather than shares, gold, or foreign currency.
This interpretation could create a legal precedent that might exclude Bitcoin transactions from Australia’s existing capital gains tax rules.
$1 billion crypto tax refund? Court ruling rocks ATO policy
In an AFR interview, tax lawyer Adrian Cartland said the verdict “completely changes” the Australian Taxation Office’s (ATO) current stance. Since 2014, the ATO has considered crypto assets as capital gains tax assets. This means users have to pay tax when they sell or trade them.
The ATO says that any time you sell Bitcoin for cash, trade it for another cryptocurrency, or use it to buy something, it considers a capital gains tax (CGT) event. This framework has guided the taxation of cryptocurrency transactions in Australia for over a decade.
However, the recent ruling questions this approach by suggesting that Bitcoin is more like money than property, which could make it exempt from capital gains tax (CGT).
Cartland said that Australians consider Bitcoin as money. The tax lawyer added that Bitcoin isn’t a capital gains tax asset, so buying or selling Bitcoin doesn’t have any tax implications.
If the court upholds the ruling on appeal, Cartland estimates potential tax refunds could total 1 billion Australian dollars (around $640 million).
