cryptovest.com
The Australian Taxation Office (ATO) has warned local cryptocurrency traders that they must declare digital coin profits in their annual tax returns, local media AFR reported on Tuesday. Virtual assets, including Bitcoin (BTC), are properties, not currencies as per Australia’s laws and regulatory rules, ATO reminded.
Profits made from crypto trading after July 2017 are liable to capital gains tax (CGT), the revenue agency explained. If Australian taxpayers hold coins for more than a year, traders can apply for the status of investors, meaning that they can receive a 50% discount on their CGT.
For filing tax returns properly, traders must keep the following information: the transaction date, the value of the coins in Australian dollars at the time of buying or selling, “what the transaction was for and who the other party was (even if it’s just their cryptocurrency address,” ATO explains on its website.
Australian citizens do not owe taxes if they pose virtual assets worth less than A$ 10,000 ($7,171) for personal use such as enjoyment. Prior July 2017, sales and purchases of cryptos were subject to goods and services tax (GST), but now only companies must pay GST when accepting digital coins as a payment method.
According to an ATO spokesperson, after Australia introduced crypto anti-money laundering (AML) measures earlier this year, virtual asset traders have become more transparent.
“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,” the spokesperson told AFR.
“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.”
One of the main new AML rules is the obligation of cryptocurrency exchanges to register with the Australian Transaction Reports and Analysis Centre (AUSTRAC) and to introduce know-your-customer (KYC) procedures. The trading platforms must also report all suspicious transactions above A$10,000 (($7,171).