GST and Digital Crypto Currency as Payment

As digital cryptocurrency becomes more common in business transactions, understanding your GST obligations is essential. Whether you’re accepting crypto as payment or using it to pay for business expenses, you must ensure compliance with Australian tax law.

Accepting Cryptocurrency for Goods and Services

When a GST-registered business accepts digital currency—such as Bitcoin or Ethereum—as payment for taxable goods or services, the transaction is treated similarly to traditional cash or EFT payments.

You must include the GST amount in Australian dollars on your tax invoice and report it on your Business Activity Statement (BAS). That means, even if the customer pays you in digital currency, the value must be converted to AUD using an appropriate exchange rate at the time of the transaction.

Your invoice should include either:

• The GST amount in Australian dollars, or

• Enough detail to calculate it, such as the AUD value, exchange rate used, or equivalent crypto value.

Using Cryptocurrency to Pay for Business Purchases

When you spend digital currency on your GST-registered business expenses, and you intend to claim the GST credit, the rules are the same.

You must:

• Ensure the invoice from your supplier includes GST in AUD or sufficient information to calculate it.

• Convert the crypto amount to Australian dollars on your BAS using a valid exchange rate.

How to Convert Digital Currency to AUD

To report accurately, you need to determine the AUD equivalent on the conversion day, which is the date you apply the exchange rate to the transaction. This rate can be sourced from a reliable crypto exchange or agreed upon with the counterparty.

If the exchange rate is provided in a foreign currency, it must be converted to AUD using the method set out in the Foreign Currency Conversion Determination 2018.

Determining the Conversion Day for BAS

Your accounting method (cash vs non-cash) will determine how to set the conversion day:

• Non-cash (accrual) basis: The conversion day is the earlier of:

  • The invoice date or transaction date, or

  • When payment is received or made.

• Cash basis: More flexibility is allowed. You can use:

  • The invoice/transaction date, or

  • The date payment is received or made.

Final Word

Digital currency isn’t the future, it’s already here. But with innovation comes complexity. The ATO treats crypto like money for GST purposes, and getting it wrong could expose you to penalties or overpayments. Whether you're invoicing a client or paying a supplier, always translate crypto amounts into AUD and record them clearly.

If you’re unsure how to handle cryptocurrency in your GST reporting, speak with one of our experienced tax advisors at Dolman Bateman. We'll help ensure your records are accurate, your BAS is compliant, and your business stays ahead of the curve.

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Disclaimer:

The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.