The Australian Government has announced it will no longer be imposing a double tax on digital currencies after July 1, 2017. The announcement, titled “Backing innovation and Fintech,” also included a number of other policy settings that would establish the continent as a global leader in the financial service industry. As per the report:
“The Government will make it easier for new innovative digital currency businesses to operate in Australia. From 1 July 2017, purchases of digital currency will no longer be subject to the GST [Goods and Services Tax], allowing digital currencies to be treated just like money for GST purposes. Currently, consumers who use digital currencies can effectively bear GST twice: once on the purchase of the digital currency and once again on its use in exchange for other goods and services subject to the GST.”
In addition to eliminating the double tax, the Australian government will initiate a number of policy changes with the goal of making the country a world leader in both innovation and FinTech. This includes relaxing the 15 percent ownership cap for new entrants to the Australian banking sector, which would allow smaller authorized deposit-taking institutions to utilize the term “bank,” as well as easing the oppressive bank licensing process.
The government will also make it easier for startups and small businesses to raise capital. According to the report, the government’s 2017-18 Budget coincides with draft legislation that would extend crowd-sourced equity funding to any registered company. As a result, businesses would be allowed to have an infinite number of shareholders. The report states that shareholders are protected as long as they meet the following prerequisites: “a minimum of two directors; financial reporting in accordance with accounting standards; audit requirements; restrictions on related party transactions; and minimum shareholder rights to participate in exit events.”
Furthermore, the Australian government plans to facilitate innovation within the financial service industry by introducing a 24-month regulatory sandbox that would allow businesses to test their new financial products and services without the need for licenses and other regulatory obstacles.