Australian Taxman Eyes Crypto-Trading Gains

The Australian Tax Office has reissued a warning to Australian traders to make sure to declare their cryptocurrency profits when reporting their annual revenues.

The taxman made it clear that any profit gained from cryptocurrency trading need to be declared in the annual tax returns. The agency also addressed the raising questions among Australians for declaring digital assets.

Property, Not Currency

The ATO made it clear that in Australia, Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term and other Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term are considered as property, not currency. So any profit incurred by selling cryptocurrency falls under capital gains tax.

Moreover, the agency clarified that if any digital asset is held for a period of more than a year by an Australian taxpayer before selling or spending it, the taxpayer may get a discount of 50 percent on the capital gains tax.

“Let’s say you originally bought AUD 5,000 worth of XEM. If you later traded it for fiat currency of AUD 8,500, then the AUD 3,500 in profit is considered a capital gain, and you’ll need to add it to your assessable income for the financial year – much like you would any gains you make the sale of shares or an investment property,” explained Liz Russell, senior tax agent at Etax.com.au to Lifehacker.

In January this year, the cryptocurrency market hit its apex as the total market cap went above $800 billion. But since then, the market has been on a continuous downturn and currently holds a little above $120 billion, as per CoinMarketCap’s data.

“If you made an AUD 3,000 loss on the sale of cryptocurrency but an AUD 4,000 gain on the sale of shares, your net capital gain would be the AUD 4,000 gain minus the AUD 3,000 loss, equalling an AUD 1,000 capital gain,” she added.

No Tax for Hobbyists

The tax agency is also exempting any tax on a crypto asset worth less than AUD 10,000, as it considers them an asset for personal use or enjoyment.

It also made the verification of customer identity for all crypto exchanges operating in Australia mandatory. Moreover, any suspicious transaction over AUD 10,000 needs to be reported to the tax agency.

An ATO spokesperson stated: “While there is no specific label on the capital gains schedule or income tax return to identify how many people have invested in cryptocurrency we are still looking at lodgement activity this year to determine any significant impact of cryptocurrencies.”

“However, we have observed through our ATO community channel and advice areas an increase in questions relating to tax obligations of cryptocurrency activity, which we see as a positive in people wanting to do the right thing in meeting their obligations,” the spokesperson added.