The Brisbane, Australia-based startup, which allows users to pay bills in Bitcoin, halted operations in October due to a double GST (goods and sales tax) on Bitcoin transactions that mostly impacted small businesses using the digital currency, said the release.
In August, the Australian Taxation Office (ATO) introduced a 10 percent GST on Bitcoin transactions. The double GST LRoS refers to in its press release is that the ATO’s ruling means Australians buying Bitcoin would have to pay an additional 10 percent GST when they buy a product or service using the digital currency. When the company posted a notice on its website in October to announce it would cease operations, LRoS included a link to a website called “No Double GST for Bitcoin,” which lists a number of businesses and organizations that have voiced their opposition to the ATO’s GST ruling.
“The GST ruling has not changed, but the resourceful bitcoin industry has,” said LRoS co-founder and CTO Daniel Alexiuc in the press release. “There are now many more options for small Australian businesses like ours to buy and sell bitcoins internationally and locally in compliance with the tax ruling, which has allowed us to reopen for business.”
Alexiuc concluded his press release by stating that “we still firmly believe that the double GST needs to be repealed for bitcoin to be ultimately useful as a currency in Australia, but for now we can continue operating as before.”
In an interview with CoinDesk, Alexiuc would not say exactly which options were offering better deals, but recommended that any fellow Bitcoin entrepreneurs go to local meetups in their city or state to get the latest information.
Alexiuc told the news outlet that under the ATO’s regulations for GST-registered business, it is still not economically possible for LRoS to continue purchasing all its Bitcoins on the local market.
“As a company, I am disappointed that we can’t support most Australian exchanges at the moment, because there are some very talented and professional outfits operating here. However, we are able to sell our coins overseas, and to Australian exchanges that comply with the GST ruling for business customers,” said Alexiuc to CoinDesk.
Reporting on LRoS’ reopening, StartupSmart said Alexiuc had looked into moving his business offshore, to Singapore or Hong Kong, until it became apparent that global exchanges would make LRoS viable again.
“It’s pretty much running the same as it was before, with the same sort of service. We’ve got approval from ASIC [Australian Securities and Investments Commission] to operate in this way, so it seems like it’s going to be sustainable for now,” said Alexiuc to StartupSmart. “We’ve got an app coming soon which will also make things easier. But the GST is still a problem for us because businesses in Australian can’t use bitcoin the way it needs to be used. And if businesses can’t use it in Australia that makes it difficult for us in the long term.”
Images courtesy of LRoS